Pensions Regulator begins enforcement action over BHS’s £571m pension deficit

Philip Green

In a dramatic development, the regulator, which has been in talks with Sir Philip and his Taveta group of companies over the retailer’s pension fund since BHS collapsed in late April, issued a warning notice to the Top Shop entrepreneur setting out why it believes he is liable to support the scheme, reports The Telegraph.

Although the talks have been ongoing for more than six months, the amount he has being offering to date has not been made public.

The notice follows an investigation by the regulator into the collapse of BHS and its troubled pension fund, including poring over some 100,000 documents.

Similar enforcement notices  – each of which is believed to run to more than 300 pages – have also been issued  to Taveta, to Dominic Chappell, the man who infamously bought BHS from Sir Philip 13 months before it collapsed, and to Retail Acquisitions, Mr Chappell’s company.

Taveta is owned by Sir Philip’s wife Lady Tina, through a Jersey company that is understood to hold all the family shares.

Each recipient of the regulator’s notices has a certain timeframe in which they must respond to the notice, after which it can issue so-called contribution notices, forcing those involved to pay up.

Lesley Titcomb, the reguator’s chief executive, said that she had taken this major step because she had “yet to receive a sufficiently credible and comprehensive offer in respect of the BHS schemes.”

Ms Titcomb had previously said that  she would make substantial progress over the fund, which has 20,000 members, by the end of this year.

“Our decision to launch enforcement action is an important milestone in our work to attain redress for the thousands of members of BHS schemes who have been placed in this position through no fault of their own,” she said last night.

When the retailer collapsed the scheme’s deficit on a buy-out basis was valued at £571m, but this is believed to have grown to more than £700m as  a result of sterling’s slump in recent months.

Sir Philip’s advisers are understood to be forming a substantive response to Ms Titcomb’s notices.

One City source said that given the legislation under which the notices had been issued has never been tested, the entire case could end up being dragged through the courts for a number of years.

Frank Field MP, chair of the Work and Pensions Committee, before whom Sir Philip appeared in June, said he wasn’t surprised with the regulator’s actions.

“His answer throughout our inquiry was always that he was going to “sort” the disastrous position he left the pension fund in,” said Mr Field.

“We are glad to see the regulator is now calling his bluff and instigating enforcement proceedings,” he continued.

News of the enforcement action is the latest problem to beset Sir Philip. Earlier this month MP’s debated his knighthood in a House of Commons debate, and in a non-binding vote, called for it to be removed.

During the debate he was called a “billionaire spiv” and likened to Napoleon.

The Cabinet Office’s Forfeiture committee have yet to decide whether he will keep his knighthood, awarded in 2006.

A spokesman for Sir Philip did not comment.