Arcadia has disputed several claims made by the head of the pensions regulator and the chief executive of the pension protection fund following a select committee inquiry on Monday (May 9).
The parliamentary inquiry into the BHS collapse started with a session investigating the BHS pension fund deficit. Ian Rubenstein, chief executive of the Pension Protection Fund (PPF), gave evidence alongside Pensions Regulator chief executive Lesley Titcomb and its director of case management Nicola Parish.
In a letter to the Business, Innovation and Skills select committee and the Work and Pensions select committee seen by Drapers, Arcadia said a number of claims made were “incorrect”, including Titcomb saying she learned of the sale of BHS from media reports.
Titcomb said: “We were not, as I’m aware, advised in advance. We learnt about the sale from the newspapers.”
However Arcadia said the pensions regulator was involved in discussions about BHS since July 2014 and was notified via email on February 6 2015 that the business was going to be sold. Arcadia said the regulator wrote to the firm on March 3 requesting an “urgent meeting”, which took place on March 4, discussing the implications of the sale of BHS on the pension scheme. While in attendance, Sir Philip Green said he was “keen to ensure that the BHS business was successful going forward and he was agreeing the sale terms in such a way to give it the best possible prospects for the future.” Also at the meeting, Arcadia said the pensions regulator was informed of the key terms of the proposed sale including the position of the pension schemes and the sale consideration of £1.
Arcadia also disputed the claim that it had provided a guarantee for the pension scheme and withdrew it in 2012.
Rubenstein said Davenbush, one of the Arcadia Group of companies, was used as a guarantor in 2011, but it was judged not to have sufficient funds to meet the value of the shortfall it was being pledged against in 2012. Its use as a guarantor lapsed, so BHS’s PPF levy subsequently increased.
However Arcadia said Davenbush was part of the BHS group but not part of the Arcadia group and “no guarantee was ever provided by Arcadia”. The firm also said the guarantee was not withdrawn by Davenbush but was “simply not certified for the purpose of the PPF levy calculation” for BHS pension schemes in 2012/13.
Arcadia also said suggestions had been made at the hearing that BHS had been paying dividends up until 2012, the retail group said this is “wholly inaccurate”.
In the letter Arcadia said: “No dividends have been declared by the directors of BHS group limited for the last 12 years.”
The firm said directors claimed dividends of £423m in 2002, 2003 and 2004, reflecting “significant” profits at the business at the time.