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The parent company of Philip Green’s Arcadia retail empire, Taveta Investments, has failed to impose an injunction on the publication of BHS’ audit reports.
It was seeking an interim injunction before a judicial review of the report, but the High Court ruled in favour of the Financial Reporting Council (FRC) disclosing all the details of the audit.
Philip Green is not a party to the proceedings, but following the collapse of the retailer which resulted in 11,000 jobs losses and sparked a parliamentary inquiry, MPs have called for his knighthood to be rescinded. Labour MP and chair of the Work and Pensions Select Committee, Frank Field described Green as the “unacceptable face of capitalism” and was in favour of the FRC releasing the full details of the report.
On 8 June 2018, Taveta was sent an advance copy of the Settlement Agreement and Particulars. It was given until 12 June to raise any accuracy concerns with the FRC. Taveta claimed it contained “alleged criticisms” and said it was not given the opportunity to respond.
The documents contain the regulatory body’s reasons for imposing a record £10m sanction on PricewaterhouseCoopers (PwC) and its audit partner, Stephen Denison, following the FRC’s investigation into the audit and financial statements of BHS for the year ending 30 August 2014.
Mr Justice Nickie ruled that Taveta demonstrated that there was a “serious issue” to be tried but said that the test for granting injunctions to public law cases were much stricter. The court was not satisfied that Taveta’s case was “exceptional” and so its application for an injunction was refused.
In June 2016, the FRC launched an investigation into PwC’s handling of the audit, two months after the retailer’s collapse. PwC signed BHS off as a “going concern” just before the retailer was sold for £1 to Dominic Chappell’s Retail Acquisitions.
PwC was fined £10m while Denison was fined £500,000 and barred from performing any audit work for 15 years. The fines were reduced by 35% to £6.5m and £325,000 respectively for early settlement.
