How Greedy Green or the 'Unacceptable Face of Capitalism' Plundered BHS

© REUTERSRetailer Philip Green speaks before Parliament's business select committee on the collapse of British Home Stores which he used to own, in London, Britain June 15, 2016.
Retailer Philip Green speaks before Parliament's business select committee on the collapse of British Home Stores which he used to own, in London, Britain June 15, 2016. - Sputnik International
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The report into the collapse of the British department store chain, BHS, has been a scathing one, with the UK Business, Innovation and Skills Committee finding Sir Philip Green guilty of systematically extracting large sums of money for himself and failing to address the deficit in the pension fund.

Sir Philip Green has been branded the "unacceptable face of capitalism" in the parliamentary enquiry. It all started when the retail tycoon took US$524 million in dividends from BHS, before selling the indebted firm on March 11 (2015) for just US$1.50 to Dominic Chappell, who had no previous retail experience and was declared bankrupt twice.

Thirteen months later on the April 26 (2016), BHS went into administration — 11,000 people were unemployed and faced an uncertain future, whilst 20,000 pensioners were left without a pension.

The parliamentary committee has come to the decision, that despite some of the failings that took place after Sir Philip had sold the business, the ultimate responsibility was with him.

Sir Philip Green acquired BHS in 2000 for US$262 million and the company pension scheme was in surplus, however due to the high level of dividends that were paid out, it weakened the pension pot.

When made aware of the problems with pensions, Sir Philip Green ignored them.

"Sir Philip gave insufficient priority to the BHS pension scheme over an extended period. His failure to resolve its problems by now has contributed substantially to the demise of BHS," the report said.

Investers were shown an unrealistic picture of the fund, which included a handwritten balance sheet prepared by finance director Paul Budge

"It was patently obvious that there was simply not enough cash in BHS to give it a realistic chance of medium term survival," the report said.

​"Sir Philip Green drove the deal forward. He sought to sell a chain that had become a financial millstone and threatened his reputation.

"He knew that Dominic Chappell was a wholly unsuitable purchaser but overlooked or made good each of Chappell's shortcomings and proceeded with a rushed sale regardless."

Chappell, was described in the report as being "out of his depth" and "over-optimistic to point of arrogance", and was accused by the committees of having "had his hands in the till."

​The report was particularly damming of Lord Grabiner QC, the non-executive chairman of the Taveta group — a holding company owned by Sir Philip's wife Lady Tina Green.

It said that Lord Grabiner QC had provided weak governance to the group and ultimately helped to lead to its demise.

"Sir Philip chose to run these companies as his own personal empire, with boards taking decisions with reference to a shared understanding of his wishes rather than the interests of each individual company," the report said.

All of this comes days after the Cabinet Office disclosed that it will be reviewing Sir Philip's knighthood.

"Sir Philip Green's family accrued incredible wealth during the early, profitable years of BHS ownership," the report said.

"Sir Philip cut costs, sold assets and paid substantial dividends offshore to the ultimate benefit of his wife. He failed, however, to invest sufficiently in stores or reinvent the business to beat the prevailing high street competition."

"We found little evidence to support the reputation for retail business acumen for which he received his knighthood," the report said.

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