Retail billionaire Sir Philip Green has gone on the offensive against MPs who probed the BHS collapse ahead of a vote in parliament later this week on whether Sir Philip should be stripped of his knighthood.
Green, who sold BHS a year before its collapse, instructed lawyers to do an independent review of the report from the Work and Pensions and Business Select Committees into the collapse of BHS. The report accused Sir Philip and subsequent owner Dominic Chappell of “systematic plunder” of the department store.
A summary of findings from Lord Pannick QC and Michael Todd QC’s review was circulated to the press on Tuesday morning. The barristers dub parts of the MPs’ reports “bizarre” and “unsupportable.” The pair also claim a court would likely “set aside” the report if parliamentary privilege did not prevent a legal challenge and accuse MPs of “breach[ing] the basic principles of fairness.”
Business Insider has contacted both Select Committees for comment and will update when we hear back.
The report review comes just 2 days before MPs are due to hold a non-binding vote on whether Sir Philip should be stripped of his knighthood for his role in the collapse of BHS.
Sir Philip Green bought BHS in 2000 for £200 million ($244.9 million). 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 blames under-investment and excessive dividend payouts for sending it into a downward spiral.
Taveta Investments, a Green family company that had ultimately owned BHS, commissioned the independent lawyers’ review and says in its briefing that the review shows the MPs report is an “inaccurate and unjustified output of a biased process,” dubbing the Select Committee hearing a “kangaroo court.”
Lord Pannick and Todd says there are “very serious factual and legal errors” in the Select Committees’ report, citing the claim that the BHS pension deficit was caused by the Green family taking big dividends out of the company.
The Green family took £307 million in dividends out of BHS between 2002 and 2005 but “these dividends were lawful and were paid at a time when the BHS pension schemes were in surplus,” the lawyers’ report concludes.
The barristers also say that there was “nothing unlawful, improper or even unusual” about Sir Philip and Taveta Investments helping BHS’ buyer, Dominic Chappell, with the finances to buy BHS. Chappell is a twice bankrupt former racing driver who had no retail experience at the time of the sale. The two barristers say criticism of the deal from MPs is “bizarre.”
Lord Pannick and Todd also defend corporate governance at Taveta investments. The chair of Taveta, Lord Grabiner, was heavily criticised by MPs during Select Committee hearings for his apparent light-touch supervision of the sale of BHS. But the barristers say: “The conclusion that corporate governance failures within Taveta contributed to the demise of BHS is unsupportable.”
The lawyers’ report also directly defends Lord Grabiner, saying: “Good corporate governance did not require that Lord Grabiner QC directly participate in the negotiations.”
Taveta says in the release that its directors “very much regret the terrible impact that the failure of BHS has had on former BHS staff and BHS pensioners and we accept that, with hindsight, it was a mistake to sell BHS to Retail Acquisitions Limited and Dominic Chappell.
“But it was an honest mistake and the sale was made in good faith.”
Taveta says that the “unfair vilification and unjustified criticism of Taveta directors” has “made it even more difficult to achieve a positive outcome to the pension settlement discussions in the interests of the BHS pensioners.”
The department store had a £275 million pension scheme black hole when the chain collapsed and the BHS pension scheme has fallen into the state-backed Pension Protection Fund (PPF), dubbed the “pensions lifeboat.” Sir Philip Green has repeatedly said he will “sort” the funding shortfall.
The Pensions Regulator recently asked for new powers to intervene in the sale of businesses that have a final salary pension scheme like BHS to stop them being dumped.