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BHS latest: Sir Philip Green, a self-serving tycoon?

By Don-Alvin Adegeest

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Retail

London - As a new portrait emerges of Sir Philip Green, the once much-admired high street retail entrepreneur is now being seen in a new light, or rather shadow: that of self-serving tycoon. With many calling for Green to be stripped of his knighthood for his questionable role in the downfall of department store group BHS, questions have arisen whether his actions are accountable for the huge deficit in BHS’ pension fund, which leaves 11,000 workers at risk.

It has by now been well documented that Green acquired the business for 200 million pounds in 2000 and sold it 15 years later for just one pound. What has only emerged this week, is that during the company’s difficult trading history, Green paid himself a hefty 400 million pounds in shares, dividends, holdings transfers, lease and management fees and interest on loans, pocketing the cash at the expense of the store he had so publicly promised to revolutionise.

A moral question remains to be answered

And while at first glance there is no indication of illegal activity, there is certainly a moral question that must be answered. How can an 88 year-old business find itself with a 571 million pound pension deficit when it’s owner is reaping in profits? Green transferred ownership of both BHS and Arcadia Group to his wife, who, as a resident of Monaco, is not liable to pay income tax. All the more telling that his style of deal-making, squeezing suppliers and clever manoeuvring of money are key contributors to his vast wealth.

With Green’s billionaire status in the spotlight this week – he reportedly awaits delivery of a new superyacht he purchased for 150 million pounds – his brand of capitalism is no longer garnering the kind respect it once had. Stewart Lansley, author of “Top Man: How Philip Green Built His High Street,” states Green needed the dividends to pay for his lavish lifestyle, “he craved the trappings of the tycoon and the lifestyle that must go with it.”

This week administrators took charge of BHS, hoping to sell it as an operating business. Retail experts are sceptical the store group will find a buyer. Green reportedly offered 80 million pounds towards the cost of BHS pensions, however shadow business minister Angela Eagle said he effectively left others to plug the hole.

Perhaps that is the business ethic of a self-serving tycoon.

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Philip Green
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