Green sold BHS to avoid pension liability - regulator

Retailer Philip Green has been accused by The Pensions Regulator of selling the BHS department store chain to avoid being liable for its pension scheme if it collapsed.

The regulator made its claim in its report into the 2015 sale of BHS to serial bankrupt Dominic Chappell for £1 and the chain's failure 12 months later.

More than 11,000 people lost their jobs, with public opinion turning against Green when it was discovered the pension fund had a £571m deficit after being in surplus earlier in his ownership.

"The main purpose of the sale [of BHS] was to postpone BHS' insolvency to prevent a liability to the schemes falling due while it was part of the Taveta group of companies ultimately owned by the Green family, and/or that the effect of the sale was materially detrimental to the schemes," the regulator said.

After months of public pressure, including a parliamentary inquiry which was scathing of all parties involved, Green finally relented and agreed to pay £363m into the schemes. He now claims the “matter is closed”.

The report also highlighted the warning notices issued to Green by the regulator, which said the businessman had taken an “active interest” in the the funding of the pensions scheme during his ownership and after the sale.

The regulator, which itself came under scrutiny during the process, admitted that it could have improved “the timeliness of our engagement and the clarity of our communications”.

"In particular, we recognise the importance of setting out clearly and robustly our expectations to pension trustees and sponsoring employers in cases where the affordability of deficit repair contributions is an issue for the employer," it said.

The regulator added that it had taken action separately against Chappell, who had no prior retail experience, and his investment vehicle Retail Acquisitions Limited (RAL).

“This report deliberately does not cover that matter, which is ongoing. As a result, this report omits details or information which could prejudice our case against Dominic Chappell or RAL. We expect to publish a further report on that matter when it concludes,” it said.