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Goldman Sachs told Arcadia about BHS buyer's bankruptcies | Goldman Sachs told Arcadia about BHS buyer's bankruptcies |
(about 1 hour later) | |
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. | 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 retailer was sold for £1 last year. | The MPs are examining the role that BHS directors and advisers played before the retailer was sold for £1 last year. |
Anthony Gutman said he told Sir Philip's Arcadia Group about Mr Chappell's history of bankruptcy and lack of retail experience. | Anthony Gutman said he told Sir Philip's Arcadia Group about Mr Chappell's history of bankruptcy and lack of retail experience. |
Arcadia executives said they considered Mr Chappell's history before the sale. | |
The joint session of the Commons Business and Work and Pensions select committees heard BHS had made losses for six years before the sale. | |
Under Mr Chappell's ownership, BHS entered administration earlier this year, putting 11,000 jobs at risk and leaving a £571m pensions deficit. | |
Business Live - MPs grill BHS directors and advisers | |
'Too small' | |
Mr Gutman, co-head of Goldman Sachs' European investment banking services, told MPs he gave his "observations" to Paul Budge, Arcadia's finance director, four months before the sale. | |
Goldman Sachs did not rule out the deal, although the transaction was "too small" for the investment bank to handle as a formal adviser, he said. | |
Under questioning from MPs, Mr Budge said Arcadia knew of one of Mr Chappell's bankruptcies during sales talks. | |
However, "this was not one man on his own" and Mr Chappell was part of a consortium with experienced businessmen, the Arcadia finance chief told MPs. | |
The main criteria for Arcadia was the consortium's access to financing and its desire to keep BHS running, Mr Budge said. | |
'Concerned' | 'Concerned' |
Earlier, the MPs heard that advisers at accountancy firm KPMG also raised concerns about the little-known Retail Acquisitions. | |
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. |
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 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 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. |