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Insolvency Service to investigate BHS administration

4 May 2016

Sajid Javid has instructed the Insolvency Service to look into the retailer’s demise and the reasons behind the administration. 

He wants an investigation into directors’ actions over the last few years which would include Sir Philip Green. Green sold BHS to Retail Acquisitions for £1 in March last year when the business was already showing signs of trouble.
Javid has requested the investigation be brought forward due to ‘unique circumstances’ (usually the Insolvency Service waits until administrators provide a report). It will run alongside other investigations already looking into the administration and pension scheme - various MP committees are meeting over the coming weeks.

It’s been reported the Serious Fraud Office is looking into recent activity as well. If an investigation proves any wrongdoing or misconduct, a director (or directors) can face disqualification up to 15 years.

Shadow Business Secretary and MP, Angela Eagle, said in a statement, “Following days of pressure from the Labour party and the announcement last week of a joint select committee inquiry, this latest statement from the government on the BHS affair is very welcome.”

“The former owners took hundreds of millions of pounds out of the business, before leaving a pension black hole which is now estimated to be worth £571m. If the former owners acted inappropriately, we need to ensure that they pay their fair share of the deficit, rather than leaving the Pension Protection Scheme – and other pension funds – to pick up the bill.”

Administrators are currently seeking suitable buyers for the business which could see 60 stores taken over. B&M and Sports Direct owner, Mike Ashley are among the interested parties.