Sir Philip Green has been told to top up his contribution to his retail business Arcadia’s pension fund, ahead of a vote on the company’s restructuring plans.
The Pensions Regulator (TPR) is understood to be demanding an additional £50 million contribution to the retirement scheme in exchange for backing the shake-up.
According to Sky News, the pensions watchdog has said it will not vote for the proposals at a meeting next week unless support for the scheme is increased.
The additional £50 million would be on top of £100 million which Sir Philip and his family have already pledged to inject into the fund.
The businessman has also put up £185 million worth of assets as security for the scheme, including its flagship Topshop store on Oxford Street.
Following Arcadia’s announcement of a company voluntary arrangement (CVA) this month, TPR said the proposed attempts to cover the pension shortfall were not sufficient.
It said: “We note from the CVA announcement that the shareholder is prepared to put an additional £100 million into the scheme over a number of years to bridge a shortfall in deficit recovery contributions.
“However, we do not consider the proposals are sufficient to ensure that members of the scheme are adequately protected.”
If the CVA is approved, Arcadia plans to reduce its annual pension contributions from £50 million to £25 million for three years.
Almost 50 stores will close and rents on nearly 200 shops will be cut.
The tussle with TPR is another headache for Sir Philip, who is also facing down landlords pushing for changes to the proposals.
Under the current plans, Lady Green, wife of Sir Philip and ultimate owner of Arcadia, has offered landlords a 20% stake of any proceeds if the group is eventually sold.