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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Sir Philip Green questioned by MPs over BHS collapse – as it happened

Sir Philip Green: I apologise for the collapse of BHS

Summary: Green rejects blame in six-hour Philibuster

Retailer Philip Green.
Retailer Philip Green. Photograph: Reuters

That was the longest and most confrontational parliamentary session I’ve covered over the last decade.

Sir Philip Green went into the grilling vowing to put his side of the story, and he took every opportunity to do so – interrupting MPs, refusing to answer questions he didn’t fancy, and taking criticism extremely badly.

Broadly, his position is that some mistakes were made, but it’s not really his fault. He doesn’t want to blame anyone else, but managed to blame pretty much everyone who had a role in this fiasco - advisers, the pension regulator and even journalists.

He seemed particularly irked with City firms Olswang and Grant Thornton for representing Dominic Chappell, suggesting they provided a sheen of respectability.

That’s a pretty poor excuse for not realising that the ex-bankrupt racing driver might not be the best person to buy BHS.

Green did at least apologise, nice and early in the session, and admit he should never have sold the company to Chappell for £1.

But he also claimed that recent criticism was “wholly” unfair, and even blamed “envy and jealousy” for the dividends which moved from BHS to his luxury base in Monaco.

Green is entitled to his point of view, but perhaps he should save the lectures until the BHS pension deficit has been fixed.

The committee struggled to land many punches on Green over the financial details of the BHS farrago. That’s because the Arcadia chief had a two-pronged strategy; he either produced his own figures to challenge the MPs, or claimed he simply didn’t get involved with whatever they were asking about. For example, the sale of BHS’s Ealing store to his stepson.

Instead, Green preferred to focus on other wrong-doing - such as Chappell’s apparent breach of the covenants set up to protect BHS.

Green did have the excuse that his wife, Lady Christina, actually owns Arcadia’s assets. Did the committee call the wrong Green? Perhaps Tina should sail one of the family’s yachts up the Thames and testify herself....

BHS pensioners did get one piece of good news - Green’s pledge to address the pension black hole. He said:

“I want to give an assurance to the 20,000 [BHS] pensioners that I am there to sort this, in the correct way.”

However, Green did not promise to ensure they would receive their full entitlement; instead, it might just be better than taking a cut in the Payment Protection Fund.

Green was also rather hazy about how the scheme fell into such a mess, insisting that he’d not bled the company dry but had actually invested capital in it.

Green’s aggressive attitude seemed to stun MPs at first; he slammed one member for excessive staring, and snarled “I can’t deal with this” when asked a pretty fair question about whether he’d deliberately offloaded BHS’s pension liabilities.

After a while they began to suspect that it might hold the key to the crisis. The committee may well conclude that the BHS disaster might have been averted if Arcadia’s chairman had been more open to criticism. A corporate governance problem, indeed.

Green also showed that he’s not at the cutting edge of technology – we got a glimpse of his antiquated Nokia mobile phone, after he failed to turn it off following a break.

Some younger viewers may have been baffled by the small booklet he waved at MPs at one stage; that’s called a cheque book, kids. And Green may well have to get it out again, and write a nine-figure sum to patch up the black hole in BHS’s pension.

That’s all from me today. Thanks for reading and commenting. Goodnight. GW

Updated

Chris Martin, chair of the BHS pension trustees, has told Sky News that he hopes Green will make an offer that means pensioners will receive more than they’d get through the Pension Protection Fund.

And that means Green stumping up more than £100m, Martin adds.

Here’s a snap of Green leaving the Houses of Parliament after being questioned by MPs today.

British businessman, and the chairman of Arcadia Group, Philip Green (C), leaves the Houses of Parliament in a car after being questioned by MPs on the fall of retailer BHS in London on June 15, 2016. Philip Green has apologised to the staff of collapsed retailer BHS, adding that he will “sort” the firm’s dilapidated pension scheme which has a £571 million black hole. / AFP PHOTO / DANIEL LEAL-OLIVASDANIEL LEAL-OLIVAS/AFP/Getty Images

I missed this earlier, but there was a small protest outside parliament, urging Green to save his reputation and cover the BHS pension black hole.

Sir Philip Green Attends Select Committee Hearing Over BHS DealingsLONDON, ENGLAND - JUNE 15: A woman waits to confront Sir Philip Green outside at Portcullis House on June 15, 2016 in London, England. Sir Philip Green is a British billionaire businessman and chairman of the Arcadia Group. He is the former owner of UK department store chain BHS which has recently ceased trading with the threat of 11,000 job losses. Sir Philip appears before a number of MP’s who will question him over the sale and then collapse of BHS on June 15, 2016 in London, England. (Photo by Rob Stothard/Getty Images)

MPs: Green must satisfy public opinion

Iain Wright and Frank Field have issued a statement, warning Green that he may have to dig deep into his pocket to satisfy public anger over the collapse of BHS.

The two MPs also warn Green that he may have to answer further questions:

“We thank Sir Philip for giving us six hours of evidence in Parliament today, and we were pleased to hear that he is still trying to put together a better deal for the BHS pensioners. We hope he will come up with an offer that is satisfactory to The Pension Regulator. However, he doesn’t only have to satisfy The Pensions Regulator, today he is before the bar of public opinion. Much of his reputation now depends on how generously he responds.

“Today’s evidence raised host of further questions and we first want to get much more detail on the structure of various companies, particularly those owned by Lady Cristina Green, the profits they have made and the tax they have paid.

“We have more witnesses scheduled at the end of June and in the last few days we have received a huge amount of further evidence. We have many further questions for Sir Philip, particularly the big questions on the pension fund that he was unable to answer today.”

Field: Green needs to make generous pension deal

Frank Field, head of the work and pensions committee, says that Sir Philip Green’s credibility is now on the line.

His reputation as a top business chief now hangs on his willingness to support BHS pensioners, says Field, speaking to my colleague Sarah Butler.

Updated

The pension regulator has swiftly responded to Green’s evidence.

In a statement, it denies refusing to engage with Sir Philip Green.

It also states that it hasn’t received any “new proposals”.

Philip Green

And finally, as Big Ben rings 3pm, Green repeats his pledge to sit down with the pensions regulator and talk about the pension scheme.

I want to get this over quicker than you do, he pledges. And he promises to do all he can to support any deal to save BHS.

And that is finally the end of the meeting, after a near six-hour marathon.

That's all folks!

Green blasts "envy and jealousy" over tax set-up

Q: With hindsight, do you think the offshore setup of your businesses is incompatible with the modern world?

Green checks his pad for a prepared statement, and then pronounces

Envy and jealousy are two incurable diseases. I have done nothing wrong.

Green insists that his empire could have been structured much more aggressively to avoid tax.

We have paid many, many hundreds of millions of pounds of tax. As far I am concerned I have a very clear conscience. We have paid everything due.

Green suggests that he could, for example, have taken his fashion brands offshore and charged a royalty.

Where we made money here, we paid tax here.

Green: Criticism has been unbalanced and unfair

Q: What lessons can we learn from the BHS failure, to help rebuild the public’s trust in the capitalist system?

Green say’s he’s immune to criticism after the last few weeks, which have meant he’s been unable to visit his stores.

Q: Do you feel hounded?

The criticism has been wholly unbalanced and unfair, Green says, a little mournfully.

I made a bad call selling this business to RAL [Chappell’s Retail Acquisitions], Green says. But other people made mistakes too, including lawyers, and now everyone says it’s just my fault.

I’m a big boy, I can take a punch on the chin.... but I didn’t do this deliberately, he concludes.

Updated

Q: Do you think your reputation has been improved by today’s session?

Green declines to mark his own homework, but hopes that people understand what happened at BHS.

I’ve had quite a few supportive emails and texts from BHS staff, he adds.

Q: What would you like your legacy to be, in a year’s time?

Green looks baffled, saying even he’s not clever enough to undo the past.

Then he talks about the work that Arcadia does in the fashion industry, encouraging young talent.

“All people in BHS know I’m honest and no way I would have wanted this kind of ending.”

In other words, he’s not a bad guy, honest...

Q: Would you consider buying BHS back if you could get the pension issue sorted?

No, Green insists. Life has moved on.

Not for the 11,000 staff at BHS, the committee point out.

Q: So who are the winners from the BHS story?

No-one, Green says, adding.

I think it was a very sad episode. Everything that could have gone wrong, did go wrong.

Q: So who are the losers?

That’s easy, Green says. The staff and the pensioners.

Green demands apology over "ego" jibe

Green then confirms that he attended a meeting with Mike Ashley and the administrators on 27 April, at Arcadia’s offices.

He produces a letter from the administrator saying Arcadia offered to add £5m to Sports Direct’s bid for BHS and did not frustrate the deal.

Q: So why did it fail?

Because of one of these, says Green, producing his chequebook.

And he denies that he did anything to block Mike Ashley from taking control

On what possible basis would I want to stop someone buying BHS?

“Ego”, says Iain Wright.

Green looks *furious*. “That’s really rude,” he says, and out of order. He says Wright should apologise.

Green starts to assembles his papers, muttering that he’s glad the meeting is over.

But it’s not over quite yet

Updated

The session turns rowdy, now, as Iain Wright probes Sports Direct’s attempts to rescue BHS.

He gets Philip Green to confirm that he didn’t know Mike Ashley (Sports Direct’s founder) was trying to sort out a deal.

And Wright then produces a letter from Ashley, which states that the two men did have contact.

Green tries to interrupt, telling Wright to stop bullying him (!) and claiming that he’s in charge of what he says.

Green then explains that he didn’t know that Chappell held all-night talks on Thursday 21 April, until the Friday lunchtime Chappell asked Green for Ashley’s phone number.

He reveals that he then had a jokey conversation with Ashley, but insists that he has zero knowledge about the negotiations.

Q: So how much contact did you have over the weekend?

We may have spoken a few times, Green concedes.

The committee turn to the events of April, when BHS went into administration.

Green denies that he triggered it - even though he refused to accept that £60m loan from Gordon Brothers.

But then Iain Wright MP reads a letter from the administrators, Duff and Phelps, showing that Green has asked him to attend a meeting.

Green explains that he was told on Friday 22 April that an unknown retailer was attempting a last-ditch rescue bid, but he didn’t know who [I think this is Sports Direct].

But if it didn’t transpire, he [Green] was concerned that staff wouldn’t be paid the next week if a deal wasn’t agreed.

Green looks like he might mislay his rag, when asked to clarify his commitment to BHS pensioners.

We covered that five and half hours ago, he says, before repeating that he will meet with the pension regulator and try to agree a deal.

Green also explains that he wasn’t prepared to support a £60m loan from investment group Gordon Brothers which Chappell had lined up in the final days before BHS went under.

It was a “loan to own”, says Green, as BHS would have breached it quickly.... meaning Gordon Brothers would have walked away with the business.

Updated

Q: Dominic Chappell told us that he was shocked that you sold the BHS Ealing branch to your stepson, and he flipped it for a £3.5m profit. Is that true?

I wasn’t involved in that deal, Green replies. It wasn’t my transaction.

Q: But did you know about it?

Green doesn’t give a particularly clear answer, but indicates he was aware the property was being sold.

Q: Is it true that you initially told the regulator that you had not sold any assets to any interested parties, and then had to correct it once the Ealing sale came to light?

Is which bit true, asks Green?

Q: That you initially told the regulator that you had not sold any assets to any interested parties, and then had to correct it?

Green says he doesn’t know.

Q: Well, could you help us check?

Green says this line of questioning is “ludicrous”.

Green: I didn't want BHS to fail.

Q: Did you have regular talks to Chappell about weekly sales?

No, says Green. Chappell wouldn’t know what they were.

Q: And you sold him the company...

Don’t remind me, Green grimaces.

And he jokes:

If you look Dominic Chappell up in the dictionary it says “very optimistic”

Q: Do what did you talk to Chappell about?

I didn’t want to the business to fail, Green insists, so he acted as a sounding board for Chappell’s ideas.

Green also disses Chappell’s claims to be a property expert, saying he failed to cut a better deal with landlords.

Chappell was also too slow to arrange the CVA [Company Voluntary Arrangement] which trimmed BHS’s rent costs, Green adds. That stubbornness undermined the chances of turning BHS around.

Updated

Green now wants the committee clerk to stop whispering to MPs during the session.

It looks like Green uses an old-school Nokia handset...

Ring ring...
Ring ring... Photograph: Parliament Live

Suddenly, a mobile phone rings, disrupting the session....and it’s Sir Phil’s!

Apologies, he says, I forgot to turn it off.

It‘s the pensions regulator, jokes Iain Wright.

The BIS/Work and Pensions committee

The committee are back again for the final part of the session.

Sir Philip Green seems quite chirpy still - maybe he can see the finishing line in sight.

Jeremy Quin MP asks about the charges that he retained on BHS after selling it, which meant Arcadia was a preferred creditor.

Green says that out of £256m of debt, £216m was written off when BHS was sold and a £40m charge was retained.

He says that he also agreed to released a fixed charge on one property, to help the new owners raise more money

Q: So you had an umbilical connection...

I’m sorry, I can’t accept that, Green interrupts, showing that thin-skinned side again.

OK, the committee are taking another quick break for a vote, but they will be back shortly.

Green would happily have finished the session right then.

Green is arguing that he didn’t realise that Chappell was unreliable...

Green says one of the “lovely journalists in the room” contributed to BHS’s demise, by undermining Chappell’s credibility each weekend.

Those articles made it impossible to get credit insurance for BHS, he claims.

I’m pretty sure he means Oliver Shah of the Sunday Times, who has swiftly responded:

Updated

Green: Chappell "breached covenants" over BHS deal

Onto another curious property deal, the sale of North West House (a BHS asset sold in 2015).

Green says that it was sold to £32m, but only £25m showed up in the BHS accounts. Arcadia were told that remaining £7m had been transferred to the Bank of China, to help set up a £100m loan.

He says that the £7m then arrived at Chappell’s lawyers, Olswang. But £1.2m was then paid to Olswang, £1.2m to Grant Thornton, £1.8m to Chappell himself....

This, Green declares. means that Chappell breached a covenant which Arcadia had made him sign, to not take money out of the business (as our Sarah Butler reported earlier this month)

MP: Does Green have a corporate governance problem?

Philip Green is getting ill-tempered again, as the committee ask how he compensated Chappell for the £8.5m profit that he didn’t get on the Marylebone House deal.

He keep trying to sweep away questions he doesn’t like the sound of.

And Iain Wright MP has spotted a pattern - suggesting that Green’s Arcadia Group has a serious corporate governance problem.

That’s your opinion, Green says.

If you behaves like this in a parliamentary committee, it must be hard for directors to raise concerns at an Arcadia board meeting, suggests Richard Fuller MP.

I’m choosing to ignore that, says Green.

Green confirms that he had planned to sell Marylebone House, BHS’s HQ, to Chappell for £35m.

[This is a crucial point; Chappell had taken a £35m loan from the Dellal family of property investors, and was planning to sell it onto them for £45m].

Green suggests he didn’t originally know Chappell was planning to turn a quick profit; even though £8.5m of profits from the deal appear on the BHS term sheet.

Q: So why did you change your mind and sell Marylebone House to someone else?

Once word spread in the property market that we were selling it, we received better offers and realised it was worth more, Green replies.

But....

Marylebone House was owned by Wilton Equity, an offshore group owned by Green’s wife Lady Tina. And it emerged last week that the property was actually sold by Wilton, to Arcadia, reportedly yielding a profit of £21m.

The committee are now turning to the financial help which Sir Philip Green provided to Dominic Chappell’s Retail Acquisitions to help the BHS purchase go through.

Conservative Richard Fuller says that Chappell’s term sheet, which claimed to have £120m of funding, actually only had £40m. So how did Green not spot the problems?

Green repeats that he wasn’t involved in the sale until he’d been convinced that Chappell was genuine.

Q: So is it a fair observation that a “wrong ‘un” got through the system because you relied on advisers for all the detail?

That’s your observation, Green replies.

But again, he’s spreading the blame to other people...while claiming he’s not blaming anyone.....

Updated

Iain Wright MP then calls Green up for his refusal to say if any of his executives raised any concerns about the Chappell deal.

You seem a dominant character, but also extraordinarily thin-skinned when asked quite courteous questions, Sir Philip ....

This seems to prick the Arcadia boss:

Wright’s point is that some Arcadia lieutenants might have been scared to raise a red flag to the Chappell deal.

Updated

Green adds that “unfortunately, we found the wrong guy” when they sold BHS to Dominic Chappell. What happened subsequently is “beyond horrible”.

Green: I wouldn't do Chappell deal again

Iain Wright MP tries to pin Green down.

Q: Was good corporate governance followed in the sale of BHS?

We’re going this again, Green asks, incredulously.

He says that Arcadia put good people on the sale -- they should have been able to do the right deal.

Q: Are you still happy with Lord Grabiner (Arcadia’s chairman, who didn’t attend the meeting where BHS was sold)?

Yes, Green insists. Grabiner is highly capable, and highly respected...

“was”, chips in one MP. Grabiner’s reputation has changed, Sir Philip....

Green concedes that he shouldn’t have sold BHS to Chappell, but insists that advisers -- both his and Chappell’s – are to blame.

Would I do that deal again, no. Am I sorry we did that deal, yes.

Richard Graham MP calls up Green about his claim that Chappell lives in Fantasy Land...

..I never said that, claims Green, astonishingly.

Yes you did, the MPs chorus. It’ll be in the record (and the liveblog, five short minutes ago)

Graham then tries to put another question about the decision to sell BHS with an unresolved pension deficit, and Green isn’t happy at all. He repeats that he’s going to find a solution, and blames the pension regulator.

Sir, the regulator has never called me! Do you want me to write down my mobile phone number and email so you can pass it on?

Updated

Green is now dishing out fashion advice to Jeremy Quin.

Updated

The committee continue to push Sir Philip Green about exactly how closely he knew Dominic Chappell, and when.

Green insists that he first met Chappell on February 3rd 2015.

Q: Meet often socially before then?

Green makes a “zero” sign with his finger and thumb.

Q: So why was Chappell telling his mates in 2014 that he was going to buy BHS? Was it a “fantasy land” idea?

Green suggests Chappell is a permanent resident of fantasy land.....

[Anyone know if Fantasy Land is a tax haven, ala Monaco?]

Updated

Green may be getting more confident - he tells Richard Fuller to ‘relax’ and stop butting in.

Philip Green today.

Q: Would you have done the BHS deal if Chappell hasn’t passed Goldman Sachs’ smell test?

No, Green insists. A million percent no.

But Richard Fuller MP suggests that Green must have had concerns -- otherwise why vet Chappell at all?

Q: So will you deal with Goldman Sachs again?

Green won’t answer this question - saying he’s not blaming anyone (?!).

He defends choosing to sell to Chappell, as he didn’t want to sell it to someone who would have put BHS into administration.

If the business plan laid out in 2015 had been followed by the new owners, the company would have survived, he adds

[Reminder: BHS’s former finance officer also told the committee last week that BHS could have been saved, with better leadership from Chappell]

Green denies that he blundered by not Googling Dominic Chappell and discovering he was a former bankrupt.

I checked Google, and found that Walt Disney and HJ Heinz were made bankrupt, he says. Businessmen go bankrupt from time to time,

Q: But your chief financial officer also knew he’d been involved with a convicted fraudster....

Green says he didn’t know the full details of the links between Chappell and Sutton.

Green: Olswang and Grant Thornton gave Chappell credibility

Philip Green seems to have abandoned his pledge not to blame anyone else.

He tells the committee that top brass at law firm Olswang, and accountants Grant Thornton, helped to give Dominic Chappell vital credibility.

I took a great deal of comfort that those two firms were representing Chappell, says Green, even though he suspect “they didn’t know the guy from a hole in the wall” before the deal began.

Updated

The committee are pushing Green about exactly how Dominic Chappell came on the scene....

Green also tries to dob Goldman Sachs in, citing a congratulatory email from top GS banker Anthony Gutman to Chappell.

Q: So, how did talks with Dominic Chappell begin?

Green says that he didn’t meet Chappell until he’d been “independently vetted” by Goldman Sachs.

[Background: last week, Chappell told the committee that he learned via Paul Sutton that BHS was for sale]

Green reveals that Paul Budge, Arcadia’s finance director, asked for an affidavit from Chappell stating that there was no link to Sutton.

Q: Why would you do that?

There was a point when we realised there was a possible connection between the men, so we wanted a pledge that they weren’t linked, says Green.

The Sunday Times’s Oliver Shah has an important insight on this point:

Updated

Conservative MP Amanda Solloway now takes up the questioning, asking Green about how the sale of BHS unfolded.

He says Robin Saunders, a top City banker, had flagged up “en passant” that she knew of a well-funded individual who was interested in buying the group.

He confirms that this was Paul Sutton, a convicted fraudster, who Green says he’d not met previously.

Chappell didn’t come onto the scene until 3 February 2015, Green insists - sinking the idea that Chappell was a leading light in Sutton’s deal team.

And Green then says that a mysterious file on Sutton landed on his desk, which prompted Arcadia to “disengage” with him.

Q: Robin Saunders told us that she warned you in June 2013 that Sutton was discredited....yet you still continued to deal with him.

Not true, Green insists - we broke off talk as soon as the file arrived [he’s vague about when it turned up, though]

Q: Did you lambast your team for not discovering problems with Sutton?

Green pauses, looking suspicious, and then asks if the committee have a note saying that happened (!).

It seems they do not.

Updated

And we’re back... Reminder you can watch the session in the top of this blog - or on Parliament Live.

Green seems in jovial mood:

Jeremy Quin MP turns to the sale of BHS to ex-bankrupt Dominic Chappell.

Green denies Chappell’s claim that he was initially led to believe he could buy BHS without its pension liabilities.

There was no question that was ever on the table once we began serious negotiations, Green insists.

Q: But this looks like a classic bait-and-switch...

Not so, Green says

Q: Chappell says he wasn’t given access to the BHS trustees or the pension regulator.

That’s not true, Green says, suggesting that Chappell actually met with Chris Martin, the head of the pension trustees.

Q: Chris Martin has notes of a conversation with you, the day after the deal was done, in which you say he potentially jeopardised the deal by telling Chappell the annual pension contributions could rise to £30m.

Green doesn’t really address this point.

Here’s our first news story on Sir Philip Green’s testimony, from Graham Ruddick:

Halftime report: Apology and aggression from Green

That was one of the most combative, sometimes aggressive performances I’ve seen from a businessman before MPs.

So, where do we stand, as the participants take a quick break?

“There certainly was no intent at all on my part for anything to be like this. It didn’t need to be like this and I just want to apologise to all the BHS people who have been involved in this”.

We want to find a solution for the 20,000 pensioners.

One finally final question before the break - was Green unhappy that Arcadia chairman Lord Grabiner didn’t even turn up for the meeting when BHS was sold?

Green declines to put the boot into Grabiner, suggesting he may have had other commitments.

And now a 15 minute break - after which, we’ll hear about the decision to sell BHS to Dominic Chappell....

Green also suggests that he did the right thing for BHS.

I could simply have put the company into administration, he argues, and addressed the pension issue that way.

And he also takes another pop at the recent press coverage:

In the last four weeks, I could be a murderer for the way they write about me.

Last questions before a quick break.

Jeremy Quin MP asks Green whether he agrees that his failure to keep a closer eye on the BHS pension scheme was a corporate governance failure.

Green doesn’t accept the charge, and then perks up when the House of Commons bells ring. Break time, he smiles.

No Mr Green, that’s the bell for prayers, Frank Field explains gently.

Is that for you or for me, asks the Arcadia boss.

For both of us hopefully, Field murmers.

Green, who looks desperate for a break, repeats that he wants everyone to know that he’s committed to finding a soltuion to the BHS pension scheme

There’s nothing I’m going to tell you that you can’t go and check up.,.... I’m not going to tell you lies.

That’s the third time Green has promised he’s not fibbing....

Richard Graham MP is pushing Green on Project Thor.

He suggesting that the scheme was suspended once the regulator demanded more details about exactly what Arcadia would putting into the BHS scheme.

And he produces an email from the chair of the BHS pension trustees, which says Green was unhappy that the regulator was “Trawling through bullshit from 10 years ago”.

Graham points out that Green had originally proposed selling BHS to Dominic Chappell free of its pension liabilities. Is that because you thought Project Thor would have been executed first?

Green won’t engage.... snarling:

“I’m sorry, are we in the same room? I can’t deal with this”

And he appeals to committee chair Frank Field to call Graham off, before repeating that he will solve the pension issue.

Graham won’t be knocked off course by Green’s antics though, referring to Dominic Chappell’s evidence from last week.

He suggests that Green decided to sell BHS to Chappell for £1 to get the pension problem off his hands (once the regulator threw up hurdles to the Project Thor scheme).

If you look out of the window, is the sky light or dark, asks Green sarcastically (and bafflingly).

He also denies that he threatened to pull the sale if Chappell contacted the pension regulator (as Chappell claimed last week).

Sky News’ Mark Kleinman reckons Green is making a substantial commitment to his former workers...

Green: We will solve BHS pension crisis

The committee turn to Project Thor, Arcadia’s proposal to restructure the BHS pension scheme, which was suspended in 2014.

Green reveals that there has been contact with the regulator in recent days, saying snidely that.

The regulator made a phone call - maybe someone bought them a telephone.

And Green hints that a deal is still possible to address the £571m deficit, saying “there does seem to be a light in the tunnel”.

Green declares that he wants to give a reassurance to BHS’s 20,000 pensioners that he will sort the problem out.

We want to find a solution for the 20,000 pensioners.

Green argues that putting the scheme into the Pension Protection Fund (the PPF - the lifeboat for failed schemes) would not resolve the issue , as the schemes are quite complex, says Green.

And he then pledges:

But I believe it is resolvable, it is solvable. We will sort it, we will find a solution.

Q: Does that mean that pensioners would get everything they are entitled to, asks Frank Field.

Green won’t make such a commitment, but repeats that his advisers are working on a solution, and it will be presented soon.

[background: there are rumours that Green could set up a separate “Phoenix” fund to provide extra payments to BHS pensioners]

Updated

Richard Graham MP suggests that Sir Philip Green met with pensions minister Steve Webb in 2012 about reducing BHS’s pension levy -- suggesting the issue was actually on his agenda.

And then he lashes out again at Graham, demanding to know:

Which bit of “don’t remember” do you find difficult?

SNP MP Mhairi Black (who isn’t on the committee) can’t believe what she’s hearing:

Green: Stupid, stupid, idiotic decisions made

Conservative MP Richard Graham leads Green through the details of BHS pension deficit.

He gets him to agree that BHS was the sponsor for its pension scheme, and that the average BHS wage was £17,000, meaning a long career would deliver a pension of £8,500 per year.

So the scheme went from a surplus when you bought it, to a deficit in 2005.

Then you later proposed putting £10m per year into the fund to fix the deficit - how was that decision made?

Green again claims it’s nothing to do with him, and tried to blame others (such as pension trustee chair Margaret Downes).

I don’t want to pass this to other people, but there has to be some accountability.....

There have been some stupid, stupid, idiotic mistakes made.

Karen Buck MP has a valiant attempt to pin Green down about the meetings he had with BHS’s pension trustees.

You can’t expect me to remember what I did eight years, ago, he insists. He suggests Buck must have been a mind-reader in a previous life if she could remember such details, and should come to work for Arcadia.

Buck points out that if she were testifying to a committee, she’d know jolly well who she’s met with.

Updated

City analyst Louise Cooper shares the committee’s sense of disbelief:

Sir Philip Green

The MPs are simply not convinced that Green could have been so ignorant about the BHS pension scheme.

Iain Wright MP points out that the Arcadia chief famously once intervened to change BHS’s coat hangers, to save £400,000 per year. Would a man who did that really ignore the pensions of 11,000 staff?

Green insists that no-one brought the issue to his attention, while also claiming that he’s not blaming anyone else.

And he also repeats that he’s not a liar...

I am here, I’m happy to be accountable. I’m not a liar, I can’t tell you about things I’m not responsible.

Someone was asleep at the wheel about the pension issue, he concludes.

Do luxury yachts have wheels?

Updated

Green keeps referring to female MPs on the committee as “your lady here” – which is going down as badly as you’d expect.

Here’s Sir Philip Green’s apology to BHS staff (delivered at the start of the hearing)

“There certainly (was) no intent at all on my part for anything to be like this. It didn’t need to be like this and I just want to apologise to all the BHS people who have been involved in this.”

Green apologises for not tackling BHS pensions earlier

Sir Philip Green is unhappy that MPs keep interrupting him, trying to pin him down on the pension problems.

He insists that he simply wasn’t involved until 2012 (!)

But we’ve been told that you’re a Napoleon of industry, explains Frank Field MP, the man in control of everything. We’re struggling to acclimatise to this new image of you...

Green looks hurt, saying:

I haven’t run away, I haven’t tried to run away.

He hits out at the “outrageous and pretty rude media coverage” in recent months, which have created quite the wrong impression.

And he then issues a second apology, for the pension deficit:

I‘m happy to apologise, I should have been involved earlier.

For whatever reason I wasn’t, but I should have been involved earlier.

Green rejects criticism over pensions

Onto the BHS pensions black hole....

Green says that the pension deficit should have been tackled as soon as he bought the company.

But he also argues that it’s not his fault, blaming “poor communication” on both sides. He also reveals he only spoke to the BHS pension trustees on a handful of occasions

Green also tries to spread the blame around, saying a lot of money was paid to pension advisers -- £650,000 in the early days, rising to “north of £1.5m” by 2005-06.

The MPs are concerned that Green doesn’t seem to have been a very caring steward of the BHS pension fund. In 2000, it had a £43m surplus, before you began taking dividends out.

Tht’s not very fair, Green insists. “With due respect” I’ve explained that we put £750m back into the company.

I was not a trustee of the pension fund, he insists.

Q: But surely you are ultimately accountable for the pension fund?

Where’s this conversation taking us, demands Green - [perhaps suspecting that his wallet is being lined up for a hit]

Updated

Q: Does your wife ever share the details of the accounts of her offshore property company (which owned some BHS properties)?

No, says Green, shaking his head and chewing on his spectacles.

Sir Philip Green

Q: Why didn’t the hundreds of millions you say you put into BHS do much good?

Retail is difficult, snaps Green - if it wasn’t, anyone could do it.

And “without being rude”, he suggests Fuller should give it a go sometime.

I know that I wouldn’t be any good at it, Fuller smiles back.

Green invites MPs to visit Arcadia to see for themselves how it works....

Richard Fuller MP – he of the piercing stare – tells Green that he learned in business that you should look people in the eye when you’re dealing with them.

Q: What’s the purpose of a company - is it to make money, to employ people, be creative?

To run a business, says Green, looking a little confused.

Fuller rattles through some BHS financial statements from 2000-2004, which he claims show that Green took a lot in dividends and invested little in BHS.

Green queries it, saying the figures show £70m was spent on capital expenditure, and £80m on corporation tax. Plus £380m in dividends.

Q: Why is the £380m dividend figure different than the £423m we’ve heard earlier?

Green airily says he’d just reading out the numbers handed by his finance team, arguing that he doesn’t really get involved with the money side of things.

I wouldn’t even know who to phone to take money out of our bank.

Frank Field MP says this is quite a contrast with Dominic Chappell, who was very intent on taking money out of BHS once he bought it from Green for £1.

Green: We should have sold in 2002

Asked about BHS’s decline under his ownership, Green says it’s very hard to find world-champion CEOs.

He pins some the blame on the “very poor property deals” signed before he bought it. Some were on leases of 40 or 50 years, and that gradually eroded the profitability.

Q: Wouldn’t it have been a good idea to sell in 2009?

With hindsight, 2002 would have been a good time to sell it, smirks Green [ie, after Tina Green had cashed that £400m dividend cheque]

Snap summary:

Green tells MP to stop staring

I’m starting to suspect Sir Philip would rather be sunning himself on his new £100m yacht, Lionheart.

He just broke off an answer to ask Richard Fuller MP to “stop staring” at him, as it’s making him uncomfortable.

Fuller insists he doesn’t want to make Green uncomfortable, as everyone stares at Green in disbelief.

Green then declines to comment on how much money is still owed to his wife Tina, as he doesn’t sign off the accounts.

But you’re a director of the company, points out a startled Jeremy Quin.

Oops.

Green now interrupts the committee so he can deliver a short speech correcting some inaccuracies delivered by previous witnesses.

He says £254m was invested in BHS in the early days.

After 2009, his Arcadia empire loaned £250m, interest free, plus another £100m in additional capital.

In total, he says, Arcadia put £600m in -- in the years between taking £400m dividends out and selling to Dominic Chappell.

He’s trying to puncture the idea that he ravaged the business like a rapacious robber baron.

Updated

Green says he first thought about selling BHS in 2014, although it would have saved “a lot of aggravation” if he’d sold sooner.

Q: Why did your Arcadia operation take over some of BHS’s back-office functions?

Green claims it was for efficiencies, saying the service was provided below cost.

And again, he’s not accepting criticism....

Michelle Thomson MP points out that Green’s property operation is based offshore, in Jersey, outside the UK tax jurisdiction.

Green doesn’t accept the criticism, saying that 30 or 40% of the FTSE is owned by offshore companies.

It is the British Home Stores, and it’s owned by your wife, points out Frank Field.

Thomson asks Green if he’ll release all his accounts, including those of the offshore companies, to help the pensions regulator conduct its inquiries into BHS.

Green says he doesn’t have these details (even though his wife Tina is the ultimate owner). He insists that he’s never held an offshore bank account.

So what first attracted you to Monaco, Mr Green?

The committee turn to the BHS properties which were sold to Green family companies (in a sale and leaseback scheme).

Q: Does that mean that you avoided paying tax on £152m rent?

It doesn’t work like that, mutters Green, suggesting this isn’t a sensible path to go down.

Q: So how does it work?

Green says he and his family left the country in 1998 for health reasons after a heart scare. He then returned to the UK to work, leaving his family behind.

He suggests that Monaco was recommended to him as a good place to recuperate.

Monaco.

Q: When did you first discover the tax advantages, asks Frank Field innocently (ish)

I think it’s well known, Green replies - but at that stage he didn’t know how his career would turn out.

Q: But didn’t you ever think that it wasn’t appropriate to be based in a tax haven?

Green denies that he structured his business to avoid tax -- we have paid tax on all the money raised in the UK, and paid a lot of it, he insists.

Updated

Green is already looking irked as the committee try to dig into BHS’s finances.

We’ve already had two “with respect”s....

Q: What about the dividends that you took out of BHS?

Green claims that he didn’t operate an aggressive financial strategy at BHS.

Q: But in 2000-2004 dividends were around double the profits...

Green cites different figures, claiming that they show BHS made a profit of £537m during that period [higher than the £400m dividends his family took out]

Q: But do you still think that the dividend policy was prudent?

The leverage used was not excessive, Green insists.

Updated

Philip Green faces MPs
Sir Philip Green faces MPs. Photograph: Parliament.tv

Updated

Green apologises to BHS staff

Sir Philip Green then tells the committee that his “emotional tie” to BHS meant he hung onto the chain too long, adding.

Nothing is more sad than how this has ended.

And he then apologises to staff at BHS for the chain’s collapse.

Green: I'll own up to mistakes

And we’re off. Frank Field begins by welcoming Philip Green.

And then Michelle Thomson starts the questioning, asking Green what value sums up his career as a top retailer.

Green looks a bit surprised by this approach, replying that “it’s not right to mark your own essay”.

He then explains that he began at the bottom, trudging the streets at 6.30am selling clothing.

If I’ve done something wrong, I’ll put my hands up and admit it. And I don’t tell lies, he pledges.

Q: So would you sum up your attribute as “honesty and hard working”.

Yes, I think so, Green replies.

The eagerly anticipated session begins shortly. We are embedding a live feed at the top of this blog (you might need to refresh to see it).

It is also being streamed live here, and on BBC Parliament.

Updated

Today’s Daily Mirror points out that taxpayers have effectively subsidised Green’s retail empire over many years, through tax credits to bump up salaries.

FT: Green must be on best behaviour

One tantalising question is whether Sir Philip Green maintains his composure once MPs probe his conduct over BHS:

Chris Nuttall of the Financial Times explains:

The first challenge facing the Svengali of the rag trade will be to keep his temper. Sir Philip has a short fuse and MPs will be tempted to see if they can light it.

Anger is the short cut to putting his foot in it. This brings us on to Point Two: don’t swear or crack jokes. The entrepreneur uses some colourful language in private and has a sardonic sense of humour. He needs to keep it clean and straight-faced for the cameras. Thirdly the entrepreneur and part-time admiral in the Monaco Navy must sound contrite – 11,000 people have lost their jobs.

Sir Philip can be expected to avoid negotiating a settlement of liabilities for BHS’s underfunded pension scheme on-air, not least because committee chair Frank Field MP wants £600m, far more than is needed to cover the deficit on an ongoing basis.

No sign of Sir Phil yet....

Dave Gill, national officer of the Usdaw trade union, says Philip Green must explain exactly why BHS failed.

He told BBC Radio 4’s Today programme.

“We should remember there are 11,000 employees that could in the next six weeks be out of jobs.

“They want to know what exactly has Philip Green been doing over the last number of years? What suddenly made him pull the plug on it? Its a very sad time and he should be held accountable for it.”

Gill adds that workers deserve answers on why Green handed the business to Dominic Chappell last year:

“The main thing that people find concerning is that he could just sell his company for £1 to someone who has already been bankrupt a number of times. It’s not as though he even tried to sell it on to someone credible who could actually try and turn the business round.”

“Reading between the lines it seems that his view was just to try and get rid of it as soon as possible.

The questions Green must answer

We’ve rounded up the 11 key questions which MPs must put to Green today, so lets see how many the MPs manage to ask.

  • Why did you sell BHS to Dominic Chappell?
  • Why were you in such a hurry to sell BHS?
  • What profit did you and your wife make from BHS?
  • What will you do to help the BHS pension scheme?
  • How much did you know about Chappell’s deal with the Dellal family? [they loaned Chappell £35m, and were planning to buy BHS’s HQ, Marylebone House]
  • Why did you sell Marylebone House to Arcadia when there were external buyers?
  • Did you use £35m of debt to unduly influence BHS in the past year?
  • Did you break a promise to arrange credit insurance for BHS?
  • Did you block a BHS rescue deal with Sports Direct? [as Chappell claimed last week]
  • How much did you or your companies pay to Retail Acquisitions or Dominic Chappell?
  • Do you think your conduct has been befitting of a knight?

More details here:

Green had threatened to boycott today’s hearing, furious with Frank Field MP for suggesting he should lose his knighthood.

But yesterday, he confirmed he would show up today, saying:

“This will be the first and only opportunity I have had to tell my side of the very sad BHS story, and I will do my best to answer all the questions put to me in an honest and open way.”

I’m not sure this is exactly the first opportunity – frankly, we’d have sent a taxi to Monaco if Green had fancied speaking out sooner.

Here’s our news story about today’s session:

People are already flocking to Portcullis House ready for Green’s appearance, in an hour’s time.

Updated

The agenda: Philip Green faces MPs over BHS scandal

Sir Philip Green (centre), models Kendall Jenner, Cara Delevingne, and Rita Ora at the British Fashion Awards.
Sir Philip Green with (from left) models Kendall Jenner, Cara Delevingne, and Rita Ora at the British Fashion Awards. Photograph: Nick Harvey/REX/Shutterstock

Good morning.

Sir Philip Green is swapping the luxury of the Monto Carlo yacht club for the relative austerity of parliament’s Portcullis House today, as MPs continue to probe the collapse of the BHS retail chain.

And it should be an absolute belter of a session, perhaps one of the most exciting since these events were televised.

Green, one of Britain’s most successful businesspeople, has been summoned to explain his part in a scandal that is costing 11,000 jobs and threatening the pensions of thousands more former employees.

The Business, Innovation and Skills committee, and the Work and Pensions committee, will together quiz Green about his stewardship of BHS, and the seemingly huge sums he paid his family during that time.

They must quiz Green on his fateful decision to sell the chain in 2015 for £1 to a man, Dominic Chappell, with a couple of bankruptcies on his CV but no retail experience.

That includes investigating curious property deals which appeared to be designed to help make Chappell look like a credible bidder.

And probably most importantly, they need to press Green hard on the BHS pension deficit (currently £571m). Why didn’t he fix this problem before the sale, rather than leaving it in Chappell’s tender clutches? And what will he do to fix the mess now?

Green’s reputation has been badly damaged by the unfolding drama around BHS already. His credibility is on the line. And so is the knighthood he received a decade ago for services to the fashion industry.

The meeting is due to start at 9.15am. And it could be an epic session, as the room is booked until 2.30pm. So get the popcorn in.

Updated

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