THE Insolvency Service has been instructed to launch an immediate investigation into the behaviour of BHS’s former directors and current senior management team following the collapse into administration of the High Street chain last week.
The fast-track move, issued by business secretary Sajid Javid, is a bold departure from the norm, as a probe would normally only begin some three months after administrators had finished their own enquiries.
Should the Insolvency Service determine that a director took part in “unfit conduct”, it can punish them by banning any offender from holding such a post for at least two years, up to a maximum of 15 years.
Responding by letter to Javid, Sarah Albon, the Insolvency Service chief executive said that if it determines a director was involved in misconduct, that took place after 1 October 2015 and caused a loss to creditors, it may apply to a court for an order that compensation be made for any losses incurred.
She stressed that no public updates will made during the Insolvency Service probe in case it undermined “our ability to successfully obtain an appropriate court order or support a relevant criminal investigation and prosecution”.
Details would be published at the investigation’s conclusion and will include the pension protection fund.
Former BHS owner Phillip Green sold BHS to Retail Acquisitions – led by Dominic Chappell, a former bankrupt and racing driver – for £1, when it was saddled with over £1bn in debts and a £571m pension deficit.
The move follows a probe launched by the Business, Innovation and Skills Committee inquiry to examine the steps taken by Arcadia Group to ensure that Retail Acquisitions Limited (RAL) was a responsible owner.
The inquiry will also examine what checks and balances were conducted by RAL to ensure that BHS was a going concern.
Grant Thornton, who are undertood to have played an advisory role in the deal, have been approached for comment.
Meanwhile, billionaire Sir Philip Green – who is facing calls to be stripped of his knighthood – confirmed that he will appear before MPs in person at work and pensions committee hearing instead of his Monaco-residing wife, Tina, who owns his UK interests, thereby ensuring no British tax on interest or dividend income is paid.
BHS transferred its substantial pension liabilities of £571m into the Pension Protection Fund, the government-supported rescue agency.
The retailer’s pension plan was fully funded when Sir Philip Green took over the company in 2000.