Everything you need to know about Sir Philip Green and the BHS parliamentary inquiry

Sir Philip Green has been branded the "unacceptable face of capitalism" in a parliamentary inquiry into the collapse of BHS.

A scathing joint report by two Commons select committees - Work and Pensions and Business, Innovation and Skills -  found that Sir Philip systematically extracted huge sums for himself but refused to address the "unsustainable deficit" in the pension fund.

Green sold BHS for £1 (Yui Mok/PA)

The retail tycoon took £400 million in dividends from BHS before selling the massively indebted firm on March 11 2015 for just £1 to Dominic Chappell (who had no previous retail experience and had been declared bankrupt twice).

Just 13 months later on April 26 BHS went into administration leaving 11,000 employees facing an uncertain future and 20,000 pensioners out of pocket.

Here's what we learned from the inquiry:

The report completely blames Sir Philip

Sir Philip Green giving evidence (PA)
Sir Philip Green giving evidence (PA)

Frank Field, the chairman of the Commons Work and Pensions Committee, said: "One person, and one person alone, is ultimately responsible for the BHS disaster. His reputation as the king of retail lies in the ruins of BHS.

The two Commons select committees accused the entrepreneur of seeking to blame anyone but himself for the firm's failure.

While the committees were damning about Dominic Chappell, who bought BHS for £1, and the "directors, advisers and hangers-on" associated with the deal too, they said that ultimate responsibility lay with Green.

Sir Philip 'resisted calls' to deal with the pension fund deficit

The sign above a BHS store in Wood Green, London
There's a £571 million hole in the pension fund (Yui Mok/PA)

When he acquired BHS in 2000 for £200 million, the report said the company pension schemes were in surplus, but the high level of dividends paid out - more than double the after-tax profits of £208 million between 2002-04 - had left it weakened.

Although he had been aware of the growing problem with the pension fund, he had resisted calls to deal with it, primarily because he did not want to reveal details of his past business dealings to the Pensions Regulator.

The report concluded: "Sir Philip gave insufficient priority to the BHS pension scheme over an extended period. His failure to resolve its problems by now has contributed substantially to the demise of BHS.

The balance sheet was unrealistically "rosy"

handwritten balance sheet prepared by finance director Paul Budge for the board of the Taveta group Ð the holding company owned by Sir Philip Green's wife Lady Tina Green which sold BHS to Dominic Chappell (PA)
Handwritten Balance sheet prepared the holding company which sold BHS to Dominic Chappell (PA)

Directors were presented with an unrealistically "rosy" picture of the sale of BHS, the report found.

It includes a copy of a handwritten balance sheet prepared by finance director Paul Budge for the board of the Taveta group - the holding company owned by Green's wife Lady Tina Green which sold BHS to Dominic Chappell.

The note, which was signed by Sir Philip and Chappell, presented a company unencumbered by substantial debt, with a secure pension scheme and a healthy "day one" balance sheet of £94 million.

"The reality was very different," the report said. "It was patently obvious that there was simply not enough cash in BHS to give it a realistic chance of medium term survival."

The committees think Sir Philip knew Chappell was an unsuitable buyer

Dominic Chappell, who bought BHS for £1 from Sir Philip Green (PA)
Dominic Chappell (PA)

The two committees  said it was "inconceivable" Green had not realised Chappell, a former bankrupt with no retail experience, was a "manifestly unsuitable" buyer and that he had "acted to conceal the true state of the BHS pension problem" from him.

Faced with consistent losses, Sir Philip struggled to find a buyer for the company - in part because of the hole in the pension fund. He settled on his junior business associate, Chappell.

In order to push the deal through, the committee said that regulatory concerns had been "circumvented", advisers were "heavily incentivised" to make progress while background checks proved "inadequate".

"Sir Philip Green drove the deal forward. He sought to sell a chain that had become a financial millstone and threatened his reputation," the report said. "He knew that Dominic Chappell was a wholly unsuitable purchaser but overlooked or made good each of Chappell's shortcomings and proceeded with a rushed sale regardless."

Chappell, described in the report as being "out of his depth" and "over-optimistic to point of arrogance", was accused by the committees of having "had his hands in the till", paying "lavish" rewards to himself and his associates while the company foundered.

The committees believe Sir Philip needs to pay out of his own pocket

Sir Philip with his wife Lady Tina Green (Jimi Celeste/AP)
Sir Philip with his wife Lady Tina Green (Jimi Celeste/AP)

The two committees believe Green has a "moral duty" to make a "large financial contribution" to the 20,000 pensioners facing substantial cuts to their benefits.

The report said: "Sir Philip owes it to the BHS pensioners to find a resolution urgently. This will undoubtedly require him to make a large financial contribution. He has a moral duty to act, a duty which he acknowledges."

It went on: "The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable.

"The tragedy is that those who have lost out are the ordinary employees and pensioners. This is the unacceptable face of capitalism.

The board of BHS didn't provide effective scrutiny of Sir Philips decisions

Frank Fields MP
Frank Fields MP (PA)

The inquiry found that boards were expected to defer to Sir Philip's wishes rather than provide effective scrutiny of decisions.

It was particularly scathing about Lord Grabiner QC, the non-executive chairman of the Taveta group - a holding company ultimately owned by Sir Philip's wife Lady Tina Green.

It said the peer had provided a "veneer of establishment credibility" to the group while the "weak" corporate governance arrangements contributed "substantially" to the ultimate demise of BHS.

"Sir Philip chose to run these companies as his own personal empire, with boards taking decisions with reference to a shared understanding of his wishes rather than the interests of each individual company," it said

He may be stripped of his knighthood

The report - among the most scathing ever issued by a Commons committee - comes just days after the Cabinet Office disclosed that it was reviewing Sir Philip's knighthood and will intensify the clamour for him to be stripped of the honour.

"Sir Philip Green's family accrued incredible wealth during the early, profitable years of BHS ownership," the report said. "Sir Philip cut costs, sold assets and paid substantial dividends offshore to the ultimate benefit of his wife.

"He failed, however, to invest sufficiently in stores or reinvent the business to beat the prevailing high street competition.

"We found little evidence to support the reputation for retail business acumen for which he received his knighthood."

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