Sir Philip Green’s assets, including his £100m superyacht, could be seized by the courts if he refuses to comply with a legal demand to cover the £571m deficit in the BHS pension scheme, the chief executive of the Pensions Regulator (TPR) has said.
Lesley Titcomb told the work and pensions select committee that a court would determine how to raise funds from the billionaire tycoon, including possible seizure of assets, if he does not pay up when a legal demand is issued, or reach a settlement with the regulator.
“If we are talking about a contribution notice, that creates a normal legally enforceable debt to the scheme and it would then be the scheme trustees or the PPF [the Pension Protection Fund] who, with our full support in any way, shape or form we could offer, would seek to recover that debt through the courts. The courts would determine how that would be achieved.”
BHS collapsed into administration in April, leading to the loss of 11,000 jobs. A parliamentary investigation into the demise of the retailer found that BHS had been systematically plundered under its former owners Green and Dominic Chappell.
Green controlled the business for 15 years until he sold it to Chappell, a three-time bankrupt, for £1 in March 2015. Green, his family and other BHS shareholders collected at least £580m from the retailer, while Chappell’s company Retail Acquisitions was paid an estimated £17m.
TPR has started legal proceedings against Green, Chappell and their companies in an attempt to plug the pension deficit. It has issued warning notices to the former owners outlining why they are liable to support the pension scheme.
Green and Chappell now have the opportunity to respond to the warning notices before a determinations panel, an independent body within TPR, decides how much they must contribute to the BHS pension scheme. The determinations panel ruling is a legal demand, but could be appealed all the way to the supreme court by Green and Chappell.
Titcomb said the panel is unlikely to meet until the middle of next year and the “door remains open” to any settlement offers from Green.
TPR is understood be seeking at least £300m from Green and said it is yet to receive a “credible and comprehensive offer”. The tycoon is understood to have offered a deal worth about £300m, but involving a complex structure and payments over many years.
Titcomb declined to provide details of talks with Green, but said the regulator had to consider a range of factors in any pension deal. “It’s not just about money, it may be about the structure of any deals,” she said.
Pushed by Frank Field, the chair of the select committee, about whether TPR could demand assets from Green, particularly his family’s superyacht Lionheart, she said the regulator did not have the power to freeze assets and it would be for the courts to decide how to recover any unpaid legal demand.
On the makeup of any settlement or willing payment from Green to a legal demand, she said: “If there is a settlement or financial support directive, then essentially what we are looking for there is some form of support for the scheme, which could be cash, guarantees or some other structure.
“There is a great deal of flexibility there in terms of what could be taken into account. Having said that, whatever is proposed under either of these routes, we would have to be absolutely sure it is robust and doesn’t create a continuing risk to either the members of the scheme or the PPF. For example, we would want to ensure that any assets that were offered would be properly valued. We wouldn’t just take any offer.”
Despite Field’s questions, it is highly unlikely that Green’s yacht will be seized. The tycoon will almost certainly not offer the yacht as part of any settlement and if the courts are forced to chase cash from him, they can target a family empire estimated to be worth more than £3bn, which includes property in London and retail business Arcadia, which owns Topshop, Dorothy Perkins and Miss Selfridge.
The courts could find it difficult to make legal claims on any of the Green family’s assets, given that many of these are under the name of Lady Green and part of a network of offshore companies unconnected to BHS.
Titcomb said: “Our warning notices are targeted at certain targets, so the debt would be collected against these targets and the court would have to go through the normal process of assessing that target’s assets.”
She said the TPR is “relentlessly” pursuing the best possible outcome for the 20,000 members of the BHS pension scheme.
This article was written by Graham Ruddick, for theguardian.com on Wednesday 23rd November 2016 12.35 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010