Did Philip Green's advisers know BHS buyer was a bankrupt?
A lot of people want to know who to blame for the mess over at BHS. Many are looking at Sir Philip Green, who of course, claims innocence over the whole thing.
However, reports suggest that Green's senior advisers actually knew that the people they sold BHS to, were led by a bankrupt, months before the sale was completed. MPs looking into this heard this news yesterday.
The bankrupt in question is Dominic Chappell, who was brought up at the joint session of the Commons Business and Work and Pensions select committees hearing yesterday, looking at BHS' collapse.
MPs want to know why Green sold the retailer for £1.
You'll remember that BHS fell into administration last month, a year after Green sold the company to Retail Acquisitions, which was led by Chappell.
While this all feels like conceptual business nonsense, the fact is, we're looking at 11,000 losing their jobs, and a £571 million pension black hole. It isn't good at all, and people need answers.
Lord Grabiner, who is the chairman of Green's Arcadia, said that they were collectively aware, as a company, of Chappell's bankruptcies. Green's right-hand man at Arcadia - finance advisor Paul Budge - also knew.
Budge said that they thought Chappell had 'a good team of people around him', so they were assured that BHS was in good hands, even though he was aware of "one bankruptcy".
Turns out Chappell has three bankruptcies. And there's more - Budge also noted that they were also aware of an 'association' between Chappell and Paul Sutton, who is a convicted fraudster. However, they were given 'assurances' that Chappell was not working with Sutton.
Budge said: "We wanted this business to thrive. We seriously believed he was surrounded by credible people."
Arcadia sought advice from Goldman Sachs, and from there, Anthony Gutman said that he'd told Budge that Chappell was a bankrupt, and that Retail Acquisitions didn't have retail experience.
And so, today the advisers from Retail Acquisitions will appear before the committee, with Chappell set to appear on June 8th, before the headline act makes an appearance - Sir Philip Green - on June 15th.
So, Green hasn't said whether he knew about all this or not, but seeing as his closest advisers knew, it certainly appears that he will have known about it as well.
As for the staff's pension deficit - it is hoped that it is going to be transferred to the Pension Protection Fund.
Concerning the administration, there may be a new buyer for BHS at some point this week - possibly as early as tomorrow. The people behind Matalan, and Poundstretcher are two that are favourites to take over.