LONDON — Britain’s Pensions Regulator, the body that oversees workplace pensions schemes, is demanding that Sir Philip Green pay a reported 350 million pounds, or $430 million, to help fill the pension gap at the defunct retailer BHS.
Following a “complex investigation,” the regulator said it has formally begun enforcement action to seek redress on behalf of the BHS pension schemes. It confirmed that it has sent statements of its case to Green, and to Dominic Chappell, who purchased BHS for 1 pound, or $1.23, from Green last year.
Chief executive officer Lesley Titcomb said the regulator’s decision to launch enforcement action “is an important milestone in our work to attain redress for the thousands of members of BHS schemes who have been placed in this position through no fault of their own.
“We are yet to receive a sufficiently credible and comprehensive offer in respect of the BHS schemes,” she continued. “We continue to pursue the best deal for members of the BHS pension schemes. If parties wish to approach us with settlement offers, that course remains open to them.”
Green said he has provided the regulator “with what I believe to be a credible and substantial proposal, with evidence and bank confirmation of cash availability, which would prevent the scheme from entering the Pension Protection Fund. This is in order to achieve a better outcome for the BHS pensioners.”
The Pension Protection Fund is an industry-funded safety net intended to protect employees if their pension fund becomes insolvent.
“I have also spoken to the chairman of the trustees, who is supportive of the proposal on the basis that it provides members with better benefits than they would receive from the PPF. I believe the above statement confirms the statement of intent that I made in regard to the BHS pensioners,” said Green.
Although the pensions regulator did not specify how much it wants Green to pay, the BBC reported on Thursday that it’s demanding 350 million pounds, and Green is offering 250 million pounds, or $307 million.
Neither Green nor the regulator would confirm the BBC’s figures.
The regulator initiated its antiavoidance investigation into BHS in March, as the company fell into administration. It said it has since reviewed 100,000 documents, and met with various parties and stakeholders.
The regulator’s demand is the latest chapter in the ongoing drama of BHS, the high street general merchandise retailer that Green sold to Chappell, a twice-bankrupt businessman with no retail experience.
Last month, British members of parliament agreed that Topshop tycoon Green should be stripped of his knighthood over the affair, although their decision is not a binding one, and a separate honors committee will have to debate and deliver its own decision to Queen Elizabeth.
The BHS debacle, with 11,000 jobs lost and 20,000 pensioners waiting to collect their money, was the subject of a parliamentary investigation over the summer, during which Green and Chappell both testified.
In their final report following the inquiry, the parliamentary committees accused Green of skimming off generous dividends during the years he owned BHS, and then standing by while the pension deficit swelled to 571 million pounds, or $700 million.
That figure has since grown, and the regulator is also chasing Chappell and his partners for their share of the money.
Green has publicly apologized for the debacle, and has said he’s been working with the Pensions Regulator since before the sale of BHS to find a solution for the pensioners.