Sir Philip Green’s controversial sale of BHS last year to a former racing driver and ex-bankrupt with no retail experience was “like giving the keys of your car to a five year old”, the former City minister Lord Myners said today.
BHS is facing liquidation and 11,000 employees are expected to lose their jobs after administrators for the 88-year-old department store chain announced yesterday that they had failed to flush out a credible buyer.
The ailing department store chain was offloaded by the billionaire Topshop owner Sir Philip for just £1 in March 2015 to Dominic Chappell and a consortium called Retail Acquisitions, despite being warned that they had no retail experience and only a “highly preliminary” business plan.
Lord Myners, who was City minister under Labour between 2008 and 2010, suggested to the BBC today that this had been grossly irresponsible.
“Sir Philip Green must take some of the responsibility, not least of all selling the business to Mr Dominic Chappell, which is rather like giving the keys of your car to a five-year-old, and then allowing the five-year-old to go off and crash the car” he said.
There is considerable bad blood between the Lord Myners and Sir Philip. Lord Myners was chair of Marks & Spencer when it fought off a £9bn takeover bid from Sir Philip in 2004. At that time Sir Philip reportedly accused Lord Myners of being an “anti-semitic left-winger”. The prompted a threat to sue for defamation.
Lord Myners resurrected the M&S episode today, saying it was fortunate Sir Philip’s bid had been unsuccessful. “Thank goodness he didn't succeed [in taking over M&S]. If he had done, I don't know what would have happened to M&S” he said.
Lord Myners, who is advising a committee of MPs who are probing the collapse of BHS, also suggested Sir Philip should relinquish his residual claims on the liquidated assets of BHS, resulting from an outstanding secured loan to the store. The tycoon’s Arcadia group could make £35m from the department store’s wind-down.
“He could give up that security and make sure the money is used for the benefit of the employees and pensioners and not claim to be in the front of the queue” Lord Myners said.
The BHS employees’ pension scheme is in deficit to the tune of £571m on a buyout basis and current workers are facing a 10 per cent cut on their payouts when it is ultimately moved into the Pension Protection Fund. Sir Philip has been criticised for under-funding the scheme in the 15 years in which he owned BHS. The chair of the Commons Work and Pensions Committee, Frank Field, has said Sir Philip should be stripped of his knighthood if he doesn’t fill the deficit.
Sir Philip, who is due to appear before MPs on 15 June, was also lambasted this morning over BHS by the head of the Institute of Directors. Simon Walker said that the tycoon has been guilty of a “lamentable failure of behaviour”.
”We spend a lot of time agonising about the loss of trust in the business community, and I think we can see why this is. I think there is a lamentable failure of behaviour and there are a lot of questions that need to be asked“ he said.
”You can't just get yourself off the hook by selling a business to someone who's been bankrupt three times and is a former racing driver with no retail experience.“
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