On Monday, the BBC’s weekly investigative current affairs program reported that Green made special payments to around 200 “favored” BHS staff, as the ailing company was going into liquidation earlier this year.
According to Panorama, staff at BHS headquarters received more than 2 million pounds, or $2.9 million, after the company failed to find a buyer. As reported, the ailing BHS shut, with some 11,000 jobs lost and a gaping hole left in its pension fund.
Green was the longtime owner of BHS, but sold it a year earlier to a consortium led by a twice-bankrupt businessman with no retail experience, Dominic Chappell. Green remained the largest creditor of BHS, and many of the clothing brands under his Arcadia umbrella were still sold there.
An Arcadia spokesman responded to the program, which aired Monday night, with a letter signed by Darren Topp, the former chief executive officer of BHS. Topp is now ceo of the British accessories brand L.K. Bennett.
In the letter, Topp said that BHS had reduced its headcount by more than 100 in January of this year, as part of a cost-cutting drive, while a further 100 staffers left in March when the company announced it was going into administration, the U.K. equivalent of Chapter 11. Plans were then put in place to find a buyer.
Topp said that, at that point, keeping head office employees was critical to its ability to sell the business whole and to run it in the short term. He said the money was set to be paid to employees on either “the sale of the business, the closure of the business, or when we no longer required them.”
The program argued, however, that staff were only told they were getting the payments after no buyer had been found, and the liquidation of the business confirmed. The extraordinary payments were then transferred directly into employee bank accounts, rather than being part of their pay slips.
According to the program, some staff referred to the payments as a “Philip bonus.”
The BBC said in a story posted on its web site that Green’s spokesman later told Panorama that “maybe payment had been delayed.”
The BHS debacle dominated British headlines for much of the spring and summer, sparking a parliamentary inquiry during which Green apologized for his role in the sale to Chappell and for letting the pension deficit swell into the hundreds of millions of pounds.
Green has repeatedly promised to sort out the pension fund, and said he is working with the U.K. Pensions Regulator to do so.
A variety of official investigations are under way into the sale and subsequent collapse of BHS, although the parliamentary committee found the breaches were ethical rather than criminal. No charges have been filed in relation to the case.