Former BHS-owner Sir Philip Green has started his long anticipated appearance in front of MPs keen to quiz him on the collapse of the high street retailer and the fate of its pension scheme, and has sought to allay accusations of tax avoidance by saying he has never moved assets offshore
Green began the joint DWP and BIS select committee session by apologising to BHS staff for the company’s failure, and said his biggest failure was ‘becoming too emotionally involved’ with the business he originally bought in 2004.
Asked about his decision to take substantial dividends out of BHS in the mid 2000s, Green said this was general practice at the time and claimed the dividends never exceeded once times cashflow.
‘This was not an aggressive finance strategy. We did not leverage excessive bank debt against profitability,’ Green said.
Asked about sale and leaseback deal involved a BHS property bought for cash by a company based offshore called Carmen Holdings which was Green family own, Green said the valuation was handled independently by Savills and all the £106m generated was put back into the business.
In response to MPs questions, Green said he left the UK in 1998 in response to a heart scare. At that point he was not active in business, but when he decided to begin work again his family remained outside the country in Monaco.
‘The business was bought while I was non resident, so the investments were from overseas. This was not a case of assets taken offshore,’ Green said.
Whilst he agreed that it was ‘common knowledge’ that Monaco offered tax advantages, he strongly denied claims this was tax avoidance.
In an increasingly tetchy series of exchanges, which has also seen Green accuse one MP on the committee of trying to upset his composure by staring constantly at him, Green said he wanted to address what he described as inaccuracies in witnesses’ statements at previous hearings.
Green told MPs that there was £254m in capital in the stores pre 2009, when the business was absorbed into the Arcadia group. Arcadia lent BHS £256m over five years on an unsecured, interest free basis. In additional there was a £100m injection of capital. Green argued this meant £600m was invested in total post dividend payments prior to disposal, when another £200m was handed over.
He told MPs that this meant that claims the company was under funded when it was sold in 2015 were incorrect. However, BHS was ‘structurally’ unsound, with too many stores on high rents in the wrong location.
‘Utopia would have been to downsize this a few years earlier,’ Green said.
The BIS/DWP session continues and is available online to view here
