BHS former shareholder refuses to reveal profit from stake sale
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Version 0 of 1. The former BHS shareholder Richard Caring has refused to reveal how much profit he made from the 2006 sale of a 22% stake in the department store group, which collapsed into administration earlier this year putting 11,000 jobs at risk. Caring’s refusal to reveal the sale price for his shares came as the accountancy watchdog admitted it could take two years to complete its investigation into the failed retailer. In a letter to MPs investigating the demise of BHS, Caring said he had paid £10m for the stake in 2001, but would not reveal how much he received for the shares five years later. He said he bought his stake a year after Sir Philip Green and his wife, Tina, took control of BHS in 2000 and was not involved in the initial buy-out. The multimillionaire restaurateur and high street clothing supplier, who was paid £93.5m in dividends from BHS during his five years as a shareholder, said he sold his stake in 2006 to Lady Tina Green, the ultimate shareholder of BHS, and the deal did not use funds from the retailer itself, suggesting it was not relevant to MPs’ enquiries. MPs are seeking to examine all the money flowing out of BHS in the 16 years before it collapsed into administration earlier this year with a pension fund deficit of £571m. Green, who sold BHS for £1 in 2015, is facing widespread criticism over the extraction of more than £586m in dividends, interest on loans and rental income from BHS over the 15 years he led the business. Robin Saunders, a fellow shareholder, told MPs she received £800,000 for her 0.5% share in BHS in 2009, suggesting Caring could have received as much as £33.6m for his stake. Frank Field MP, chair of the work and pensions committee, one of two parliamentary committees looking into retail chain’s demise, said: “Richard Caring refuses to tell us how much he was paid by Lady Green in 2006 for his secret shareholding. He tells us that this is private, and not within the scope of our inquiry. “On the contrary: understanding these mutually beneficial secret deals, understanding exactly how Sir Philip Green managed to make BHS so lucrative for his family in the early years, is crucial to understanding the mess we are in now, with 11,000 jobs and 22,000 people’s full pension entitlement on the line.” Caring, who has refused to attend parliament in person to give evidence, said he was not in a position to assess why BHS had failed as he was not closely involved in the business after 2006 and had only ever been involved in running its women’s clothing business. “As far as women’s wear is concerned, I believe that prior to 2006 all that could have been done to make BHS a success, was done.” He denied offering special discounts to BHS to boost profits when he was a shareholder but revealed he had supplied £20.9m worth of goods to the retailer in 2002 and was still supplying £9m of clothing in 2015 when Green sold the business. As part of the enquiry, MPs wrote to the Financial Reporting Council, the accountants’ watchdog, asking it to consider broadening an investigation into the conduct of accountancy firm PWC in auditing of BHS in the year to August 2014. In a letter published on Tuesday, the FRC said it would consider extending the time period it was investigating and might look into companies connected to BHS if evidence suggested it should do so. The FRC warned that it had no set deadline to conclude its investigation although it aimed to do so “in about two years”. “We will work for as rapid a conclusion as possible but when the outcome may culminate in highly contentious litigation we have to take great care,” Stephen Haddrill, FRC chief executive, wrote to Ian Wright MP, chair of the business innovation and skills committee which is investigating BHS’s demise. |