Following news of BHS going into administration, there were calls for accelerated investigation of the insolvency, following accusations that the parent company Retail Acquisitions was not fit to run the organisation.
Sajid Javid, Business Secretary has ordered a probe by the Insolvency Service, fast-tracking the investigation into the collapse of UK department store British Home Stores. This comes after owner, Sir Philip Green agreed to appear in court to answer questions about the business going into administration.
BHS was sold last year for £1 to Retail Acquisitions from Sir Green, this was criticised originally and even more so asBHS went into administration this April, threatening thousands of jobs up and down the country. In a statement Mr Javid said “I have asked the Insolvency Service to bring forward its investigation rather than wait three months for the administrators to report before launching their enquiry.”
The department store was bought by Sir Green in 2000 for £200m and when the store was sold last year there were questions about the lack of retail experience held by Retail Acquisitions. Sir Green is believed to have offered to provide a sum of up to £80 million to help the company, however he has been accused of crashing BHS ‘into a cliff’.
Although there is no suggestion that Sir Green did anything illegal, former chairman of Marks and Spencer, Lord Myners has said that Sir Green has big questions to answer. Lord Myners said “The big question is whether when Philip Green sold BHS to a group of individuals with no retail experience, led by a former mini racing car driver and twice bankrupt person... that the pension scheme had enough assets to meet its liabilities.”
Lord Myners added “It’s the responsibility of the owner to either make sure that the pension fund is adequately funded or that the new owner is going to take on that responsibility and is a fit and proper person with adequate funding and sensible plans to ensure that the deficit will be covered.”