Ted was, of course, a Tory. I wonder if we will have any of his successors saying similar things of the asset stripping at cost to the creditors, pensioners and others at BHS?

Of course there is more to learn about the failure of this company. But prima facie it would appear Sir Philip Green sought to offload his responsibilities to a new management headed by a person who had twice been bankrupted and who has now taken the group to failure whilst appearing to extract considerable reward for related parties.

Any lawyers care to comment?

21 thoughts on “Hmmm”

  1. “Its the Tories’ fault BHS has closed!” wails the left

    “When did you last buy anything from them?” asks everyone else…

  2. So Much For Subtlety

    Well the Daily Mail doesn’t engage in the usual Tory bashing, and I assume they have lawyers. So they say what everyone, surely, must know:

    And to many observers, the pantomime villain of this unfortunate tale is none other than the plutocratic Sir Philip.

    A key reason, they argue, lies in the fact that during his 15 years in control of BHS, Sir Philip took more than £400 million out of the firm via special dividends paid to his wife Tina, who lives in the tax haven of Monaco.

    Though perfectly legal, the tax-efficient payments meant that cash which might otherwise have been used to bolster the pension fund or, indeed, to invest more in the firm’s long-term future, was instead funnelled into the family coffers.

    By then offloading BHS, at a time when it was losing around £85 million a year, Sir Philip was able to relieve himself of the duty (or ‘covenant’) to fulfil commitments to future pensioners who belonged to the by now troubled scheme.

    That covenant passed to the firm’s new owners, who hardly inspire confidence in their ability (or willingness) to settle such debts.

    http://www.dailymail.co.uk/news/article-3510128/A-100m-floating-gin-palace-pension-scandal-scupper-Sir-Topshop-Philip-Green-faces-calls-stripped-knighthood-buys-yacht-BHS-teeters-brink-bankruptcy.html#ixzz46vB5P1LL

    But with a lot more envy

  3. Whilst Sir Philip did indeed pay his wife those dividends instead, at least in part, of closing the pension scheme deficit, that deficit hit the groip’s balance sheet and resulted, at least in part, in his wife receiving the princely sum of £1 for her shares.

    As to Ritchie’s accusations of enrichment for “related parties”, it will or will not be shown to be true. I doubt though that Ritchie has any inside information we don’t. So he would seem to me to have been a little bit silly. That’s unusual for him, he’s usaly quite the expert at stepping right to the line but no further.

  4. So Much For Subtlety

    Ironman – “Whilst Sir Philip did indeed pay his wife those dividends instead, at least in part, of closing the pension scheme deficit, that deficit hit the groip’s balance sheet and resulted, at least in part, in his wife receiving the princely sum of £1 for her shares.”

    So Green bought a company for £200 million. He transferred at least £400 million (and some say £1.2 billion) to his wife.

    He then sold the debts and the pension liabilities to someone else for a pound.

    A year later BHS went into receivership owing some £1.3 billion with a further £570 million or so in pension liabilities.

    Yes, I am sure his wife was heart broken the value of her shares was reduced to one pound. Absolutely heart broken

  5. I doubt if we’ve bought anything from BHS since the early 80s.

    Big retail stores are largely doomed – the same thing is going on in the US.

    If Green or his successor are guilty of crime, jail the buggers. Even if not, any decent chap should spurn the company of Green at every opportunity. But it’s unlikely that he moves in the company of decent chaps.

  6. Movement on the pension reserve is chargeable to other comprehensive income. Profits available for distribution are after said charge.

  7. “during his 15 years in control of BHS, Sir Philip took more than £400 million out of the firm via special dividends paid to his wife Tina, who lives in the tax haven of Monaco.”

    And how much did the State extract from BHS in taxes? Business rates, employment taxes, taxes on the income of employees, VAT, I’d be prepared to bet that what Mrs Green got out of (her own) company is considerably less than what the State took out of it over the years.

  8. The dividends were transferred over a nber of years. Yes – and as those who can both read and understand all at the same time will see I have already noted – pension liabilities were allowed to build up whilst dividends were paid. However, those dividends were from profits accumulated after the pension liability was taken to the balance sheet, so malfeasance isn’t shown here. The natural build up of value that one would expect to occur has in fact been turned in a share value of £1

    The bigger picture here – which no talk of Philip Green at al cask – is of a business failure. Dividend payments haven’t altered that.

  9. Private investor group makes bad private investment decision. Previous owner played a (perfectly legal) blinder.

    I’m struggling to see what else is relevant ?

  10. And entertainingly the Mass Murder advocate Andrew Dickie goes biblical on us in the comments – hilarious!

    ‘One point not directly referred to is that Green bought BHS for £200 million in 2000, yet managed to “pay” at least £450 million in “dividends” (!!!) to his Monaco domiciled wife, so shifting the core assets of BHS outside UK control and HMRC reach.

    Frankly, the only “lifting up” Green deserves is that meted out to the baker in the story of Joseph in Genesis (see Chapter 40, verses 16-22)’

  11. It seems that the private investor group made a very good investment decision from the point of view of the wealth of the investors.

    But a bad one for BHS of course. Could it be that allowing rich people to do whatever most profits them is not always best for the general economy?

  12. If memory serves the trick that Phillip Green did was to do a sale and leaseback of all the BHS stores to a company set up specially for the purpose and owned by Mrs Green. On receipt of said hundreds of millions for its properties BHS paid out a special dividend I believe the very same day to…Mrs Green.so in effect Mr Green extracted all the property assets from BHS for nothing. Subsequently BHS paid large rents for leasing their properties to Mrs Green stripping further operating income from BHS making it increasingly difficult to make any profit until finally the business including all liabilities is sold off for a pound having been comprehensively looted by the Monaco based Tina. Meanwhile Mr Green with no onshore UK assets of his own is compensated by the fact that his good buddy and former bagman Richard Caring suddenly comes into some good fortune and buys lots of restaurants and clubs that Mr Green rather naughtily refers to in revelry as “mine”. Which of course couldn’t possibly be true.

  13. @SJW – Best for the economy ? Probably not. But I’d rather the odd robber baron (obviously acting on a legal basis) than the alternative, which is the government deciding to involve itself in private business deals on the basis of what ‘it’ considers to be best for the economy.

  14. It’s good of Sir Philip Green to have employed Bob Hoskins to play him in real life as I hadn’t seen Bob in any meaty role for ages.

    Let’s hope Bob goes all “The Long Good Friday” on the Work & Pensions Committee when they call him before them (or maybe “Who Framed Roger Rabbit?” for comedy effect?)

  15. The joke is on Mrs Green if her company is unable to find people prepared to rent those properties, or who are prepared to buy up the freehold. There are plenty of store buildings lying empty on most of the high streets of the UK. Not so many takers for big stores in places like Southampton, Portsmouth, Chatham etc

  16. Also, is there a public authority on the hook to close the pension scheme’s deficit? If so, perhaps the thinking behind that safety net needs reconsideration, and the role of pension fund trustees.

  17. @So Much For Subtlety, April 26, 2016 at 9:58 am

    Also in Daily Mail

    “Turning around the company was always going to be a struggle, even for someone as shrewd as Green, who bought it for £200 million 16 years ago.

    There’s no doubt that he knows how to repair a misfiring business. He turned round Arcadia — owner of a raft of High Street names including Topshop, Wallis, Burton, Evans and Miss Selfridge — after buying it in 2002.

    Indeed, his skill in doing so allowed him to compete head-on with High Street newcomers such as Spain’s Zara and Japan’s Uniqlo, as well as more established players such as Next and M&S (which Green tried to buy in 2004).

    But BHS was a different kettle of fish. Its reputation was as a fusty place to buy cheap school uniforms, dowdy women’s hats and inexpensive light fittings.

    Its stuffy, moderately priced cafes were popular with the older generation.

    Green made several attempts at sprucing up the stores by giving franchises to some of his fashion brands, and by updating the furnishings on offer.”

    As @Rhyds notes: “When did you last buy anything from them?” asks everyone else.

    P

  18. The problem with BHS is in the name: it sounds totally Orwellian and wretched. British Home Stores…I’d imagine the type of place Murphy flocks to.

    Much is in the name. Take Rover cars for example. Rover? FFS.

  19. “Sir Philip took more than £400 million out of the firm via special dividends paid to his wife Tina,” – from the Daily Mail article.

    One comment – Sir Philip Green used his wife’s money to buy BHS in the first place. She’s the one with the money.

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