Sir Philip Green vs Select committee

[avinalarf]

Digga said:

avinalarf said:

This is not only a moral issue,it is not an environment in which a business can, long term, flourish.
I stress Long Term.

There's a lot about the UK business environment that's short-termist and there's a lot of legislation that really discourages both entrepreneurship and long term investment. So having even a small number of participants operating outside of the law, without redress, is particularly damaging.

I agree ,it's a real problem,one not easy to resolve for quoted companies as there are different criteria that sometimes are working against each other.
Shareholders expect ever increasing dividends and it is a responsibility of a company to produce them.
Let's forget the lawbreakers even Green is not being accused of lawbreaking.
It's whether we want companies run in a way that considers its responsibilities to shareholders and employees,the environment and long term sustainability.

Edited by avinalarf on Wednesday 27th July 14:31

[avinalarf]

sidicks said:

Murcielago_Boy said:

I think your view is incorrect and/or simplifies the issue.
PS could become underfunded even if he was to make the requisite investments through no fault of his.

I'm not saying that's what happened but he's not solely liable for the underfunding.

1. As the business owner he was solely liable for the scheme deficit
2. The cause of much of the deficit was market movements rather than not meeting his agreed scheme payments.

What plans and when were investments made during his ownership of the company ?

[Welshbeef]

avinalarf said:

sidicks said:

Murcielago_Boy said:

I think your view is incorrect and/or simplifies the issue.
PS could become underfunded even if he was to make the requisite investments through no fault of his.

I'm not saying that's what happened but he's not solely liable for the underfunding.

1. As the business owner he was solely liable for the scheme deficit
2. The cause of much of the deficit was market movements rather than not meeting his agreed scheme payments.

What plans and when were investments made during his ownership of the company ?

Well employer pension contributions are every month for every eligible employee.


The owner doesn't dictate the Pension fund style of investment it is strictly to the trustees there is a distinct line of separation.

[sidicks]

avinalarf said:

What plans and when were investments made during his ownership of the company ?

I'm not a Trustee !

[avinalarf]

Welshbeef said:

avinalarf said:

sidicks said:

Murcielago_Boy said:

I think your view is incorrect and/or simplifies the issue.
PS could become underfunded even if he was to make the requisite investments through no fault of his.

I'm not saying that's what happened but he's not solely liable for the underfunding.

1. As the business owner he was solely liable for the scheme deficit
2. The cause of much of the deficit was market movements rather than not meeting his agreed scheme payments.

What plans and when were investments made during his ownership of the company ?

Well employer pension contributions are every month for every eligible employee.


The owner doesn't dictate the Pension fund style of investment it is strictly to the trustees there is a distinct line of separation.

With respect that was not the question I asked.
However are you suggesting that there are not wheels within wheels.

[johnwilliams77]

avinalarf said:

I knew Green in the 1970/80's and ran a similar business and we mixed in the same business circles.
There was a clique of guys that always sailed either very close or in some cases over the legal boundaries,not suggesting Sir Green did anything illegal.
Some of these guys did very well financially and their names are often in the trade press and newspapers.
Let me add I never got involved in the shinanigans,not my style.
My frustration is that the legislation regarding financial malpractice is either not in place or toothless when it is.
The real blame lies with the great and the good which allows morally bankrupt business people to evade any legal retribution.
The biggest financial scandal of recent times is the banking fiasco which has ruined the lives and expectations of many hard working decent families that tried to do "the right thing" and have been truly fecked.
What Green has done was to take advantage of a MORALLY BANKRUPT SYSTEM .
This is not only a moral issue,it is not an environment in which a business can, long term, flourish.
I stress Long Term.
It is relatively easy to build a well funded business that, whilst growing,produces good results,it is a different thing to consistently produce those results without long term reinvestment and strategic planning.

You still got your Aston

[Welshbeef]

avinalarf said:

Welshbeef said:

avinalarf said:

sidicks said:

Murcielago_Boy said:

I think your view is incorrect and/or simplifies the issue.
PS could become underfunded even if he was to make the requisite investments through no fault of his.

I'm not saying that's what happened but he's not solely liable for the underfunding.

1. As the business owner he was solely liable for the scheme deficit
2. The cause of much of the deficit was market movements rather than not meeting his agreed scheme payments.

What plans and when were investments made during his ownership of the company ?

Well employer pension contributions are every month for every eligible employee.


The owner doesn't dictate the Pension fund style of investment it is strictly to the trustees there is a distinct line of separation.

With respect that was not the question I asked.
However are you suggesting that there are not wheels within wheels.

Totally - it is regulated to specifically remove such issues.

[sidicks]

Welshbeef said:

Totally - it is regulated to specifically remove such issues.

It's not that straight forward, there is a trade off to be made and the Sponsor has significant input Into the Trustee investment decisions, but they ultimately have control.

And have powers if they believe that the members are at risk.

[Murcielago_Boy]

sidicks said:

1. As the business owner he was solely liable for the scheme deficit
2. The cause of much of the deficit was market movements rather than not meeting his agreed scheme payments.

Understood.
So to what extent can the blame for the pension deficit be fairly/reasonably apportioned to PG?

A well meaning business owner can do exactly what the trustee advise, request a cautious approach to the investment of a Pension Scheme and still end up with a huge deficit.

HOW MUCH IS THIS PG'S FAULT?

[sidicks]

Murcielago_Boy said:

Understood.
So to what extent can the blame for the pension deficit be fairly/reasonably apportioned to PG?

A well meaning business owner can do exactly what the trustee advise, request a cautious approach to the investment of a Pension Scheme and still end up with a huge deficit.

If you took a cautious approach you'd never end up with a huge deficit!

Murcielago_Boy said:

HOW MUCH IS THIS PG'S FAULT?

It remains to be seen whether PG (the company) could have afforded to pay higher contributions before it went bust.

[anonymous-user]

This has been a genuinely educational thread. Blimey. Thx Sidicks et al.

[Zigster]

I saw a chart somewhere (would have to do some searching to see if I could find it again) which showed how the BHS Pension Scheme surplus/deficit had changed over the last 15 or so years compared with those of other large companies'.

Pension fund deficits have generally increased over that period, but the BHS Pension Scheme deficit had increased by significantly more. There was a clearly steeper downward trend for BHS.

That trend has to be primarily a combination of differences in investment strategy or differences in contributions. Differences in experience such as mortality are unlikely to be a large part of the trend difference.

To be clear, this isn't the point that the press seem to get confused about around the change in measurement approach once BHS became insolvent, but is comparing "Technical Provisons" at each point.

[avinalarf]

sidicks said:

Welshbeef said:

Totally - it is regulated to specifically remove such issues.

It's not that straight forward, there is a trade off to be made and the Sponsor has significant input Into the Trustee investment decisions, but they ultimately have control.

And have powers if they believe that the members are at risk.

Entrepreneurs and other successful business people did not get where they are by being stupid.
Most work very hard to achieve their position and gain experience in their business and during that process they get to know those people they can use to their advantage.
Most have forceful personalities that may overcome the doubts of those responsible for due diligence.
However we digress the point is that the BHS debacle was most probably within the Law.
It is the lack of legislation,that means anything in the real World ,and the lack of sanctions to hold people that break that legislation to book.
To repeat myself....Green did not break the law .....he took advantage of the lack of more stringent and effective legislation

Edited by avinalarf on Wednesday 27th July 15:37

[Countdown]

avinalarf said:

Entrepreneurs and other successful business people did not get where they are by being stupid.
Most work very hard to achieve their position and gain experience in their business and during that process they get to know those people they can use to their advantage.
Most have forceful personalities that may overcome the doubts of those responsible for due diligence

They sound very similar to gangsters.

[sidicks]

avinalarf said:

Entrepreneurs and other successful business people did not get where they are by being stupid.
Most work very hard to achieve their position and gain experience in their business and during that process they get to know those people they can use to their advantage.
Most have forceful personalities that may overcome the doubts of those responsible for due diligence

If The Trustees aren't able to fulfill their important regulatory duties, they shouldn't be Trustees!

[Jockman]

Countdown said:

avinalarf said:

Entrepreneurs and other successful business people did not get where they are by being stupid.
Most work very hard to achieve their position and gain experience in their business and during that process they get to know those people they can use to their advantage.
Most have forceful personalities that may overcome the doubts of those responsible for due diligence

They sound very similar to gangsters.

Would a Gangster offer a Defined Benefit Pension to all of his Employees? Surely he would opt for a Defined Contribution one

[Jockman]

sidicks said:

avinalarf said:

Entrepreneurs and other successful business people did not get where they are by being stupid.
Most work very hard to achieve their position and gain experience in their business and during that process they get to know those people they can use to their advantage.
Most have forceful personalities that may overcome the doubts of those responsible for due diligence

If The Trustees aren't able to fulfill their important regulatory duties, they shouldn't be Trustees!

Pretty sure they will have Insurance? Might need it?

[sidicks]

Zigster said:

I saw a chart somewhere (would have to do some searching to see if I could find it again) which showed how the BHS Pension Scheme surplus/deficit had changed over the last 15 or so years compared with those of other large companies'.

Pension fund deficits have generally increased over that period, but the BHS Pension Scheme deficit had increased by significantly more. There was a clearly steeper downward trend for BHS.

That trend has to be primarily a combination of differences in investment strategy or differences in contributions. Differences in experience such as mortality are unlikely to be a large part of the trend difference.

To be clear, this isn't the point that the press seem to get confused about around the change in measurement approach once BHS became insolvent, but is comparing "Technical Provisons" at each point.

Presumably they were less hedged, likely because they couldn't afford to lock in a deficit.

[Whoozit]

sidicks said:

If you took a cautious approach you'd never end up with a huge deficit

Not true. There are any number of external factors that go into calculating the fund's assets and liabilities, none of which are
In the owner's control. People expected to love longer. Interest rates go up/down. Prudent expectations of investment returns change. And since these are assessed only every three years IIRC, there could indeed be a sudden swing.

Trustees have to balance how closely to shear the sheep. Not so deep the sheep is damaged, but enough so the wool keeps growing.

[Countdown]

Jockman said:

Would a Gangster offer a Defined Benefit Pension to all of his Employees? Surely he would opt for a Defined Contribution one

There's a difference between "offering and taking all the contributions" and actually "providing". He's effectively taken all their money and done a runner.