Inquiry into BHS directors could be reopened

The inquiry into the former directors of BHS could be reopened following the discovery of new information by the Financial Reporting Council (FRC), Retail Sector has learned.

The chief executive of the Insolvency Service Sarah Albon, requested more information from the FRC regarding the conduct of the retailer’s directors.

The report sparked a legal battle between the FRC and Taveta Investments, parent company of BHS, as the company wished to impose an injunction on certain aspects which it believed would expose business dealings. The High Court ultimately ruled in the FRC’s favour allowing the regulator to disclose all the details.

The FRC told Retail Sector that it was still putting together the information for the report and full details will be released imminently.

Following the hearing, Frank Field MP wrote to the Insolvency Service, asking if it was not “now clear and compelling evidence that the Insolvency Service should reopen their investigation into Sir Philip Green and his fellow BHS directors in place at the time of the sale in 2015.”

BHS was sold to one of its directors, Dominic Chappell, for £1 in 2015 which the Work and Pensions and Business, Innovations and Skills Committees concluded was done by Sir Philip Green in a rush to offload the failing company and avoid paying its £571m pension deficit.

The following year, the company went into administration. In June 2018, PwC was fined £10m for its handling of the BHS audits. This followed an investigation by the FRC which asked why BHS’s directors assessment of the company was not disputed by PwC considering the company signed off BHS’s audit days before it was sold.

Albon replied that in the course of the Insolvency Service’s investigation it “did indeed consider the question of the preparation and content of the 2014 accounts for Taveta and BHS”, it then concluded that there was “insufficient evidence of directorial misconduct to justify disqualification proceedings.”

She said: “I can confirm that we have written to the FRC in light of their report, requesting they make available to the Insolvency Service any material they hold relating to the conduct of the directors of the Taveta group that we were not previously aware of.

“We will examine what they provide in order to determine whether there is any new evidence that may give us cause to review our decision to conclude the investigation.”