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Sir Philip Green hits back at Pensions Regulator in BHS row

Published 11/05/2016

Sir Philip Green has dispatched a letter through his company Arcadia to a joint committee of MPs investigating BHS's demise
Sir Philip Green has dispatched a letter through his company Arcadia to a joint committee of MPs investigating BHS's demise

Sir Philip Green has cast doubt over evidence given by the Pensions Regulator in relation to the collapse of retailer BHS.

The billionaire has dispatched a letter through his company Arcadia to a joint committee of MPs investigating the department store's demise.

The document describes evidence given on Monday by Lesley Titcomb, chief executive of the Pensions Regulator, as "incorrect".

Referring to Ms Titcomb's claim that she only became aware of the sale of BHS from newspapers after it happened, the letter claims that Arcadia informed the regulator in February 2015, a month before its sale.

The letter reads: "The evidence of Ms Titcomb has been widely reported in the press, but it is incorrect.

"On 6 February 2015, the Pensions Regulator was notified by email (copied to the trustees of the BHS pension schemes) that a decision had been taken to market the BHS business with a view to obtaining a solvent disposal."

The document also mounts a defence of dividend payments, amounting to £423 million, paid to Sir Philip and his family.

It says that the money was paid out from 2002 to 2004, when BHS was making "significant profits".

Sir Philip will be probed by MPs from the business and work and pensions select committees on June 15 over the dividend payment, his management of the pension scheme and the decision to sell the business for £1 to a consortium led by former bankrupt Dominic Chappell.

BHS collapsed in April, putting 11,000 jobs at risk and leaving a £571 million pension fund black hole.

The letter claims the regulator "was informed of the key terms of the proposed sale of BHS ... the position of the BHS pension schemes and the plan for the business".

Crucially it states that the decision to sell BHS to Mr Chappell for £1 "was expressly referred to".

It added: "Sir Philip Green explained to the Pensions Regulator that he was keen to ensure that the BHS business was a success going forward and that he was agreeing the sale terms in such a way to give it the best possible prospects for the future."

"Specifically in relation to the BHS pension schemes, Sir Philip expressed his strong wish to agree a sustainable solution and there was a discussion as to the possibility of implementing a restructuring with the approval of the Pensions Regulator," the letter said.

A spokesman for The Pensions Regulator said: " We did discuss the proposed terms of a potential deal with trustees and the employer, however, we were not given sufficient information at that time to assess the potential impact on the BHS pension scheme."

He added: " Employers can apply to The Pensions Regulator for a clearance statement if they are considering actions which could be materially detrimental to a defined benefit scheme and its members.

"Clearance is not approval or authorisation for a transaction to proceed. The employer or the purchaser did not approach us for clearance in this case.

"Given our concerns regarding the BHS Pension Scheme and the circumstance relating to the sale, and in the absence of clearance, we opened an anti-avoidance investigation which superseded our earlier valuation investigation."

Frank Field, MP and chair of the Work and Pensions Select Committee, said Sir Philip's letter was an "important intervention".

"Its central message is disturbing and does nothing to change my view of the adequacy or otherwise of pension regulation," he said.

In a letter to the committee following Sir Philip's comments, Ms Titcomb said: "The trustees informed TPR (the Pensions Regulator) that a sale was likely to be to a company called Swiss Rock, which triggered further engagement by TPR with the trustees and Arcadia.

"This culminated in a meeting on 4 March 2015 with the trustees and Arcadia. We discussed terms of a potential imminent sale, however there was not sufficient information to assess the potential impact on the pension schemes.

"TPR was not approached for clearance in advance of the transaction, and, as I explained in my oral evidence, we learned of the confirmation of the sale to Retail Acquisitions Ltd on March 12 when it was made public. TPR was not informed about this in advance.

"TPR subsequently learned that Swiss Rock had changed its name to Retail Acquisitions Ltd. Upon learning of the sale completing, we opened an investigation into whether it would be appropriate to use our anti-avoidance powers in respect of the transaction. This investigation is ongoing."

Ms Titcomb added that the regulator did not learn of the confirmation of the actual sale until March 12.

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