Insolvency Service to probe BHS administration
The UK's Insolvency Service has been instructed to launch a fast-track investigation into the circumstances surrounding last week's collapse retailer BHS, which has left around 11,000 jobs at risk.
The probe is specifically tasked with considering the extent to which the conduct of the directors of BHS led to its demise.
"I have asked the Insolvency Service to bring forward its investigation rather than wait three months for the administrators to report before launching their inquiry," said business secretary Sajid Javid. "This investigation will look at the conduct of the directors at the time of insolvency and any individuals who were previously directors. Any issues of misconduct will be taken very seriously."
Should the investigation conclude that one or more present or former directors have been involved in any misconduct, an application may be made to a court to ask that they be disqualified from acting as a director for a period between two and 15 years depending on the nature of their misconduct.
Where conduct for which a person was disqualified took place subsequent to 1 October 2015 and caused a loss to creditors, an application could also be made to a court for an order that compensation be made for losses incurred.
BHS called in the administrators last Monday (25 April), putting a potential end to 88 years of trading. The administrators are continuing to run the business while they seek to sell it as a going concern.
BHS's former owner Sir Philip Green has come under increasing pressure over the department store's collapse and its GBP571m pension deficit.
Sir Philip, who is chairman of the Arcadia Group, which owns the Topshop, Topman, Wallis, Evans, Burton, Miss Selfridge and Dorothy Perkins chains, bought BHS for GBP200m in 2000, but sold it to Retail Acquisitions – a consortium of financiers, lawyers and accountants led by twice-bankrupt Dominic Chappell – last year for just GBP1.
At the time, Retail Acquisitions said it would provide GBP160m of funding to help turn the fortunes of the chain around, but was not able to raise the sum. The company is understood to have recorded a loss of GBP85m (US$120.3m) in its last financial year.
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