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Goldman Sachs reviews Sir Philip Green relationship amid BHS controversy

Published 29/06/2016

The Goldman Sachs Building in London as the investment bank revealed it is reviewing its relationship with Sir Philip Green
The Goldman Sachs Building in London as the investment bank revealed it is reviewing its relationship with Sir Philip Green

Goldman Sachs is reviewing its decade-long relationship with Sir Philip Green in the wake of retailer BHS's collapse.

Michael Sherwood, the investment bank's Europe boss, told MPs that the firm's involvement in the BHS saga has not enhanced its reputation and has moved to reconsider its involvement with the billionaire.

"We've been reviewing Goldman Sachs' relationship with Sir Philip Green at this point," he said.

Sir Philip's reputation has taken a battering since BHS collapsed in April, leaving behind a £571 million pension deficit and putting 11,000 jobs at risk.

The Topshop tycoon, who owned the retailer for 15 years until 2015, has come under fire for taking £400 million in dividends from the company and then selling it to former bankrupt Dominic Chappell.

Goldman Sachs provided unpaid "informal" advice to Sir Philip's Arcadia group during the sale process, and some of its top bankers faced MPs from the Business committee on Wednesday.

In Sir Philip's own appearance in front of MPs, he insisted he would not have done business with Mr Chappell if he had failed the US bank's "sniff test".

However, Mr Sherwood was quick to absolve Goldman of any blame for the retailer's collapse.

"I absolutely do not accept blame. He never passed our sniff test. Anthony (Gutman) and I never told Sir Philip that he had passed out sniff test. All we highlighted was observations about the risks around Mr Chappell and the transaction. Our role was extremely limited."

Mr Sherwood forged close links with Sir Philip when helping him with a failed bid for Marks & Spencer a decade ago, while Mr Gutman was tasked with dealing with BHS.

At a later session during the hearing, MP Frank Field became visibly agitated when grilling Arcadia chief executives, even accusing Sir Philip of "nicking money".

He said: "If Sir Philip was serious he could today settle the pension issue. We are fed up with hearing 'I am about to fix it.' He does not fix it. What is required is a very large cheque from the Green family, that have done so well out of the whole of this exploitation.

"The City is furious with your behaviour, the image you have put over, that business is not about creating jobs, about spreading wealth, it's about nicking money off other people.

"That is what we have seen, and we have got left very vulnerable pensioners and very vulnerable people trying to find a job in the labour market. Sir Philip could fix this today if he was serious."

However, Sir Philip hit back, accusing Mr Field of "clear prejudice" against him as the war of words intensified.

He said: "Mr Field's outrageous outburst today demonstrated yet again his clear prejudice against myself, my wife and my executives, who turned up for a second time.

"He arrived very late, offered no apology, heard no evidence, clearly just to put on a 10-minute show and was extremely rude. Accusing me and my family of theft is totally false and unacceptable on any basis.

"The committee was yesterday made fully aware of the fact that a solution for the BHS pension funds is being worked on. His behaviour is as far as you can get from being helpful to anyone in this situation.

"Mr Field needs to apologise for his shocking and offensive behaviour."

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