Sir Philip Green may be forced to pay compensation to 20,000 members of the BHS pension scheme after the UK’s pensions regulator started an enforcement action against the retail tycoon.
Green, who also faces the loss of his knighthood after a parliamentary vote last month, is “liable to support the BHS pension schemes, following the sale of the business in March 2015 and its subsequent insolvency,” the regulator said in a statement.
“Our decision to launch enforcement action is an important milestone in our work to attain redress for the thousands of members of BHS schemes who have been placed in this position through no fault of their own,” Pensions Regulator Chief Executive Lesley Titcomb said in a statement on the regulator’s website.
“Issuing Warning Notices at this time reflects the outcome of our investigations and that we are yet to receive a sufficiently credible and comprehensive offer in respect of the BHS schemes.”
The regulator sent notices of more than 300 pages each to Green, his investment companies and former BHS boss Dominic Chappell on Wednesday evening.
Green said in an emailed statement sent to Business Insider:
“I have read the statement from the Pensions Regulator this evening and noted its contents. I have provided the Regulator with what I believe to be a credible and substantial proposal, with evidence and bank confirmation of cash availability, which would prevent the scheme from entering the Pension Protection Fund. This is in order to achieve a better outcome for the BHS pensioners.
“I have also spoken to the Chairman of the Trustees who is supportive of the proposal on the basis that it provides members with better benefits than they would receive from the PPF. I believe the above statement confirms the statement of intent that I made in regard to the BHS pensioners.”
Sir Philip Green bought BHS in 2000 for £200 million ($244.9 million) and his family took more than £300 million in dividends out of the business shortly afterward. He sold it for £1 in 2015 and the department store collapsed into administration in April of this year. BHS had been struggling for years and a government report into its collapse blamed under-investment and excessive dividend payouts for sending it into a downward spiral.
Around 50 MPs last month unanimously backed a motion in UK parliament calling for Sir Philip Green to be stripped on his knighthood in the wake of the collapse.
He was criticised for holidaying on his luxury superyacht in Greece while the estimated £275 million black hole in the BHS pension fund remained unresolved.
Business Insider Emails & Alerts
Site highlights each day to your inbox.