New evidence could see BHS directors investigated

There has been little news coverage concerning BHS ever since Sir Philip Green was forced to pay 363 million pounds into its pension fund in 2017.

To refresh any reader's memory, less than a year before the troubled department store collapsed, Green sold the business for 1 pound to Dominic Chappell, a formerly bankrupt businessman with no experience in the retail sector. 11,000 workers lost their jobs and its pension deficit was assessed as 571 million pounds in debt. The total number of workers affected was 22,000.

Last week BHS made headlines once again as new evidence from an auditing report by the Financial Reporting Council (FRC) could prompt the Insolvency Service to reopen its investigation into its former directors.

According to The Times, the Insolvency Service’s chief executive Sarah Albon has written to the FRC to request more information on the findings within its report, as its initial investigations led to the conclusion that there was “insufficient evidence of directorial misconduct to justify disqualification proceedings”.

The FRC’s report is thought to be critical of the audit carried out by PwC on BHS’s financial statements and the conduct of directors of Taveta Investments, the holding company for Sir Philip Green’s Arcadia Group retail empire of which BHS was a part for 15 years.

“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,” Albon wrote in a letter to work and pensions committee chairman Frank Field MP.

She added: “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 directors of the Taveta group that we were not previously aware of.”

Last month the FRC sanctioned PriceWaterhouseCoopers (PwC) and audit partner Steve Denison in relation to the dubious 2014 audits of BHS and the Taveta Group (Taveta) following an investigation under the Accountancy Scheme opened in June 2016.

PwC and Steve Denison have admitted Misconduct and accepted substantial fines of 10 million pounds and non-financial sanctions.

The FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issues affecting the public interest. Its mission is to promote transparency and integrity in business and sets the UK Corporate Governance and Stewardship Codes for accounting and actuarial work, setting auditing and ethical standards and monitors and enforces audit quality.

Photo credit: BHS Geography; Article source, The Retail Gazette