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KPMG 'raised concerns' about BHS sale to Retail Acquisitions Goldman Sachs told Arcadia about BHS buyer's bankruptcies
(about 1 hour later)
A BHS pensions adviser raised numerous concerns about the consortium that later bought the retailer for £1 last year from Sir Philip Green, MPs heard. A Goldman Sachs banker told a key executive from Sir Philip Green's company about the risks of selling BHS to Dominic Chappell, MPs heard.
The MPs are examining the role that BHS directors and advisers played before the ill-fated sale. The MPs are examining the role that BHS directors and advisers played before the retailer was sold for £1 last year.
BHS was bought by Retail Acquisitions, led by former bankrupt Dominic Chappell, who had no retail experience. Anthony Gutman said he told Sir Philip's Arcadia Group about Mr Chappell's history of bankruptcy and lack of retail experience.
Advisers at accountancy firm KPMG said they told BHS about concerns over Mr Chappell's newly created group. However, the bank did not rule out a deal with Mr Chappell, he said.
Mr Gutman, co-head of Goldman Sachs' European investment banking services, told MPs he gave the "observations" to Paul Budge, Arcadia's finance director, four months before the sale.
Goldman Sachs was not a formal adviser on the deal because it was "too small" for the investment bank to handle, he said.
The joint session of the Commons Business and Work and Pensions select committees will hear later from Mr Budge and other senior Arcadia executives.
'Concerned'
Earlier, the MPs heard that advisers at accountancy firm KPMG also raised concerns with Arcadia about Retail Acquisitions, the acquisition vehicle led by Mr Chappell.
David Clarke, a partner at KPMG, told MPs: "We were particularly concerned about its ability to continue to trade and fund both BHS - which was clearly loss-making - and the [pension] schemes."David Clarke, a partner at KPMG, told MPs: "We were particularly concerned about its ability to continue to trade and fund both BHS - which was clearly loss-making - and the [pension] schemes."
KPMG, which was an adviser to the embattled BHS pension schemes, sent their concerns to the retailer and its other advisers ahead of the sale, Mr Clarke said.KPMG, which was an adviser to the embattled BHS pension schemes, sent their concerns to the retailer and its other advisers ahead of the sale, Mr Clarke said.
Business Live - MPs grill BHS directors and advisersBusiness Live - MPs grill BHS directors and advisers
BHS entered administration earlier this year, putting 11,000 jobs at risk and leaving a £571m pensions deficit.BHS entered administration earlier this year, putting 11,000 jobs at risk and leaving a £571m pensions deficit.
Other advisers from accountancy firms Deloitte and PwC, and law firm Eversheds, said they had not raised concerns about Retail Acquisitions.Other advisers from accountancy firms Deloitte and PwC, and law firm Eversheds, said they had not raised concerns about Retail Acquisitions.
The joint session of the Commons Business and Work and Pensions select committees will hear later from senior executives of Sir Philip's retail empire. The MPs heard that BHS management decided to pause a pension rescue plan, known as Project Thor, in 2014 to let managers focus on trading.
Earlier, the MPs heard that BHS management decided to pause a pension rescue plan, known as Project Thor, in 2014 to let managers focus on trading.
The rescue plan was then shelved in February 2015 as the possibility of a BHS sale emerged, the committee heard.The rescue plan was then shelved in February 2015 as the possibility of a BHS sale emerged, the committee heard.
That revelation takes some pressure off the Pensions Regulator, which had faced questions about why it did not allow Project Thor to go ahead.That revelation takes some pressure off the Pensions Regulator, which had faced questions about why it did not allow Project Thor to go ahead.