Pension Lifeboat Wants New BHS Administrator

Wednesday 22 June 2016
By Mark Kleinman, City Editor
One of BHS's biggest creditors is demanding the appointment of a second administrator to the stricken retailer amid concerns about the complex web of ties connecting the company's former owners.
Sky News has learnt that the Pension Protection Fund (PPF), which acts as a safety net for employees of insolvent companies, has requested that FRP Advisory be appointed alongside Duff & Phelps following a meeting of creditors on Thursday.
The PPF, which has estimated that the cost to it of meeting BHS pensioners' retirement payments would be at least £275m, is understood to have lodged a proxy filing to place FRP's appointment on the agenda at that meeting in London.
If approved by a court, FRP would alongside Duff & Phelps, which said last month that attempts to find a buyer for BHS had been unsuccessful and that the company would be wound down, threatening 11,000 jobs.
The request from BHS's biggest unsecured creditor reflects its deepening concern about the crisis at the high street chain amid bitter recriminations centring on former owners Sir Philip Green and Dominic Chappell.
MPs have launched a wide-ranging inquiry into the circumstances surrounding BHS's collapse and on the stewardship of its pension schemes, which Sir Philip pledged last week to address.
To do so, he is likely to have to write a cheque for several hundred million pounds, although the precise structure of a rescue deal for pensioners is expected to take several months to finalise.
On a full buyout basis, the BHS pension deficit is now thought to be more than £600m.
FRP's appointment is expected to lead to it playing a role investigating the conduct of BHS's former directors, including those involved with the business before it was sold by Sir Philip to Mr Chappell's Retail Acquisitions Limited (RAL) last year.
Parliament has heard evidence of numerous secret payments, property transactions and negotiations aimed at fixing the yawning deficit in BHS's pension schemes.
During a hearing earlier this month, Mr Chappell alleged that Sir Philip had referred to Duff & Phelps as his "ponies", implying that the administrator would do the tycoon's bidding.
Both parties have rejected Mr Chappell's characterisation of that relationship, and Sir Philip denied that he had had any improper influence over the firm's appointment as the administrator to BHS.
The PPF has been keen for several weeks to see other advisers appointed alongside Duff & Phelps, although it would not comment on the source of its concern on Wednesday.
The MPs inquiry, which is running in tandem with probes by the Insolvency Services and Pensions Regulator, is awaiting replies to a series of questions about the ownership of Sir Philip's corporate empire.
Next week, they intend to hear from witnesses including Goldman Sachs bankers and Sir Philip's stepson.
Sir Philip had threatened not to appear before MPs unless Frank Field MP stepped down as chair of the Work and Pensions Select Committee, but turned up in Westminster anyway.
During a fractious hearing, the tycoon admitted making a mistake in selling BHS to RAL but placed much of the blame on Mr Chappell's failure to implement his business plan, and accused him of stripping the retailer of millions of pounds in unauthorised payments.
FRP was unavailable for comment while Duff & Phelps declined to comment.