Brian Parkin reports on the loss of over 11,000 jobs that will result from BHS going out of business, a story which has seen the former and current owners treat themselves to multi-million pound yachts, while workers’ pensions funds face a massive black hole.
At last, after weeks of speculation, British Home Stores (BHS) has been allowed by the receivers to pass out of administration and out of business. With the passing will go the jobs of over 11,000 workers, and pending an urgent bail-out, a staff pension fund upon which more than 30,000 current and former employees were hoping to depend on in retirement. And by remarkable coincidence, the pension fund deficit of nearly £600 million is roughly the amount that Green and family managed to bleed out of BHS between 2009-15.
After off-loading BHS for the sum of £1 in March 2015 to a very dodgy outfit called Retail Acquisitions, run by a failed racing driver Dominic Chappell who went on to become a twice failed dodgy business man, Philip Green could hardly have been surprised when his former retail chain went bust on 25 April.
No surprise because when in his ownership, BHS was milked by Green’s family for over £400 million in ‘remunerations’, as well as allowing the store’s occupational pension fund go into a whopping £571 million deficit. Of course for Green, all of this must have been a terrible distraction as he prepared to take delivery of his new £150 million private yacht in Monaco where his wife is registered in order not to bother the UK tax office with the profits from the Topshop brand which just happens to be in her name.
Philip Green is used to getting more than just a little leeway with his colourful business ventures which is why, of course, he is a major cash donor to the Tory party. Hence the extremely relaxed attitude of the UK authorities of late who seemed to not notice when Green handed his wife, Topshop Tina, ownership of BHS and in the process awarded himself a sale dividend of £1.2 billion. Tina is the named owner of Arcadia Group that not only acts as an offshore umbrella for Topshop, but also serves as a ‘black hole’ where losses from parts of Greens empire that might normally threaten insolvency, are transferred and written off.
Property as theft
Also through Arcadia, Green has been able to establish a freehold property empire. A glance at Arcadia’s portfolio of holdings shows two commercial property holdings which surprise, surprise also happen to hold most of the sites occupied by BHS stores. One such company, Carmen Properties is registered in the tax haven of Jersey and earned the Greens £151.4 million in rents from 12 stores. Yet another shadow property company, Mildenhall, has netted the Greens £3 million in ground rent for BHS’s head office – long after Green had disposed of the company.
New boy, fly boy
Dominic Chappell, you will be glad to hear, did not come a cropper due to Greens BHS legacy. No sooner had he warmed his behind on Greens former boardroom chair, he awarded himself an initial salary of £540,000, cashed in on his £25 million in fees from the company transfer, bought himself a new yacht and loaned his father £1.3 million mortgage with the company standing security. It was also revealed by the Sunday Times a year ago that Chappell and his fellow spiv, Paul Sutton had set up a separate secret company in Panama less than one month after acquiring BHS. This would be no novel thing for Sutton, who was sentenced to 3 years in a French gaol, for embezzlement in 2002.
It is now estimated that Chappell and Sutton made themselves payments of £25 million in the 13 months ownership of BHS. At the same time neither Green nor BHS’s new looter-directors did anything to address the £571 million hole in the pension fund over which Green administered with neither accountability nor responsibility since 2004. Although the state sponsored Pension Protection Fund (PPF) is now investigating the scandal, it is unlikely to pursue Green himself to make good the deficit. In the meantime the PPF will probably set a cap on the levels of benefit (pension) payable and at the same time pass over the liabilities to the tax payer.
Also as BHS’s current debts of £1.3 billion are likely to be devalued to a mere 1.23 pence for every pound, meaning at the end of the next full trading month, BHS in receivership will be unable to pay outstanding wages or meet the bills of their former suppliers. In what had been a desperate bid to find a new owner, receivers Duff & Phelps, began possible takeover talks with slave wage crook Mike Ashley of Sports Direct. But without an immediate prospect of putting BHS’s staff on zero-hour contracts and fitting them with tracker tags, Ashley lost interest. So now, as the BHS stores go silent and laid off staff face the end of the month with uncertainty over due wages and the future of their pensions, Green will be basking on his new yacht in the safety of his wife’s Monaco tax haven. Which goes to show, that in capitalism’s stagnant pond, the scum always rises to the top.