Sir Philip Green has come in for a fair bit of flack this week. The poor dear has done nothing illegal. Yes, he gave his wife, who is domiciled in Monaco (which means she misses our lovely weather) £400M dividends from BHS whilst at the same time running up a pension deficit of £500M. Yes, the £1.2Billion (I spelt it out because the B doesn’t do justice to the numbers) which he paid himself (or his wife I should say) some years ago was four times greater than the groups’ entire profits for the year but there is no suggestion, certainly from this quarter, that he has done anything wrong, legally. Morally and ethically that is a different matter.
My friend Joe, the pedant who is also an accountant, has pointed out to me that it is perfectly legal to pay early dividends providing it is from revenue and does not cause the company to be unable to fulfil its normal liabilities.
The current owner of the beleaguered company Dominic Chappell, twice a bankrupt, blithely finished his email to staff (yes, an email) with “I would like to say it has been a real pleasure working with all of you on the BHS project, one I will never forget… Bonne chance!” That’s all right then, it was only a project not the means by which long serving employees feed their family, pay the mortgage and live; most of the employees on the shop floor earn less than the so called living wage. It was obviously a pleasure for Chappell and his colleagues who took over BHS for they managed to relieve the stricken company of £25M during their brief tenure.
In 1973 the then Tory Prime Minister Ted Heath spoke about the unacceptable face of capitalism (referring to Lonrho), a view echoed this week by some Tory, yes Tory, MPs. It would be nice to think that the whole sorry saga of BHS is a wakeup call for our political masters. Together with the revelations from the Panama papers, in which it is alleged Dominic Chappell features, which showed that the richest people and companies in the world didn’t pay their fair share of taxes anywhere let alone where they should.
Socialists will tell you that all this is inevitable in a capitalist society, but none but the most extreme would have suggested that it was as blatant as it is today. The transgressors are unashamedly open with their ill-gotten gains. I’m sure Sir Philip, Tony Blair gave him his knighthood since you ask, will not be too bothered as he sips his Crystal Champagne on board his new megayacht for which he paid £100M. It’s his third yacht. The length of a football pitch; it is four stories high.
The Leave campaign suggests that leaving the EU would enable the UK to reduce the regulations governing business. I am probably alone amongst commentators in advocating more regulation. For too long business, small as well as large, have seen regulations controlling their accounts procedures and auditing reduced substantially and in some cases removed completely. The behaviour of some businesses is scandalous and must be stopped. Whilst the hard working citizens of this country continue to face severe austerity measures imposed by this uncaring government people like Green and Chappell are able to walk away with millions, sometimes billions, quite legally.
Sir Philip has at last been summoned to meet an MP’s committee to explain the huge hole he left in the BHS pension fund after acquiring a seemingly healthy company in 2000. The final kick in the teeth for the hapless employees is that Chappell, who put the company into administration is involved in trying to buy back some of the more profitable stores. You couldn’t make it up.
Just in case you think, dear reader, that I am in fact making it up, all the above facts can be verified in the Guardian/Daily Mail of the 26th April 2016.
During the height of Thatcherism in 1987, Gordon Gekko (Michael Douglas) said in the film ‘Wall Street’ – “Greed is Good”. It became the defining statement of the Thatcher years. Some things never change.