Philip Green, does anyone care what the truth is?

Philip Green, does anyone care what the truth is?

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FredClogs

14,041 posts

160 months

Thursday 20th October 2016
quotequote all
Sheriff Fat man, innit. He's just operating at a level above the public sphere, Level 2 arse wipe.

anonymous-user

53 months

Thursday 20th October 2016
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[quodte=FN2TypeR]https://www.theguardian.com/business/2016/oct/20/philip-green-labelled-billionaire-spiv-in-commons-debate-on-knighthood

I imagine he will be devastated rolleyes
[/quote]

It's a meaningless gesture. The time to be investigating him was before he was 'honoured' but for some reason he suited the establishment'spurpose then; now he doesn't. He's the same bloke now as he always was.

Imho he's no better or worse than any of the MPs hunting him down.

JNW1

7,711 posts

193 months

Thursday 20th October 2016
quotequote all
sidicks said:
As owner of the business, he was fully responsible for funding the pension scheme. He did NOT take dividends when the scheme was in deficit. Indeed he had established additional contributions to close this deficit, albeit over 20 rather than the usual 10 years, presumably because the profitability of the business simply did not support a higher level of contributions.

When he sold the business, that responsibility shifted to the new owner.
Sorry but he did continue to take money out of the business after the pension schemes went into deficit!

You're right when you say as owner of the business he was responsible for ensuring the pension scheme was funded adequately; however, it had been heavily in deficit for some considerable time prior to the sale to Chappell's company so what was Green doing for all those years? The recovery plan he eventually came up with was far from satisfactory and to me it's not acceptable to take hundreds of millions out of a company in the good times - thereby depriving it of funds that could be used for a rainy day - and then throw your hands up when it starts raining and say the money's not there to correct something like a pension scheme deficit within a reasonable timescale. If Green had shown some positive intent to get to grips with the pension deficit in the period 2009 to 2015 he could have probably avoided all this bad publicity; however, as it is he just looks like he's been content to let the deficit sit there and then palm it off to someone who frankly didn't appear to know the first thing about running a business.

You seem to be implying continually that Green didn't continue to take money out of the business after the pension schemes went into deficit and that he took reasonable action to ensure the funding of the pensions schemes was adequate once the deficits became apparent; I'd disagree on both counts!

sidicks

25,218 posts

220 months

Thursday 20th October 2016
quotequote all
JNW1 said:
Sorry but he did continue to take money out of the business after the pension schemes went into deficit!
You keep saying that - I'll believe when you show me the evidence! And why did the Trustees let that happen?!

JNW1 said:
You're right when you say as owner of the business he was responsible for ensuring the pension scheme was funded adequately; however, it had been heavily in deficit for some considerable time prior to the sale to Chappell's company so what was Green doing for all those years?
Paying the recovery contributions, as agreed with the Trustees (over 20 years). There wasn't the business cash flow to pay any more, as far as I'm aware...

JNW1 said:
The recovery plan he eventually came up with was far from satisfactory and to me it's not acceptable to take hundreds of millions out of a company in the good times - thereby depriving it of funds that could be used for a rainy day - and then throw your hands up when it starts raining and say the money's not there to correct something like a pension scheme deficit within a reasonable timescale. If Green had shown some positive intent to get to grips with the pension deficit in the period 2009 to 2015 he could have probably avoided all this bad publicity; however, as it is he just looks like he's been content to let the deficit sit there and then palm it off to someone who frankly didn't appear to know the first thing about running a business.
The scheme was funded - regulations do not permit a massive surplus to be built up, and no-one could predict what would happen to interest rates. As I explained the BHS scheme is not unique, hundreds of schemes suffered in exactly the same way.

JNW1 said:
You seem to be implying continually that Green didn't continue to take money out of the business after the pension schemes went into deficit and that he took reasonable action to ensure the funding of the pensions schemes was adequate once the deficits became apparent; I'd disagree on both counts!
I'm still waiting for you to prove what you are claiming!

Adrian W

Original Poster:

13,848 posts

227 months

Thursday 20th October 2016
quotequote all
REALIST123 said:

It's a meaningless gesture. The time to be investigating him was before he was 'honoured' but for some reason he suited the establishment'spurpose then; now he doesn't. He's the same bloke now as he always was.

Imho he's no better or worse than any of the MPs hunting him down.
I think that sums it up, such a fickle world

crankedup

25,764 posts

242 months

Thursday 20th October 2016
quotequote all
sidicks said:
crankedup said:
Most of your response is your usual stuff, nit picking.
Not at all, please re-read your post.

crankedup said:
sidicks said:
JNW1 said:
The link below might help to shed a bit of light on things!
http://uk.businessinsider.com/sir-philip-green-bhs...
That link appears to show that £307m was taken out of the firm between 2002 and 2004.
It also shows the pension scheme to be in surplus during that time, as I claimed originally.

What have I missed?
Erm, how about the intervening years 2005 - 2015
:
In other words, your comment, quoting my post, was irrelevant to the discussion that was being had (which was abut the dividends taken from the company and the pension deficit situation at that time).


crankedup said:
Green invested hundreds of millions, well that is what I said, millions of pounds. are you suggesting that he didn't enjoy tax concessions for this year after year investment?
Yes, if you make losses they can often be offset against profits elsewhere. However the tax relief is only a proportion of the loss incurred, so you've still worse off overall.

crankedup said:
So far as running down the business, I am sure this was not a deliberate action on his part, simply that he was caught out wanting on how to turn the thing around.
Of course I also look upon the BHS disaster from a moral standpoint as well as a dreadful management perspective.
So your conclusion is that Green invested a lot of money into the business and, for whatever reason, couldn't turn it around?
Yes I know how the tax system works. And of course he would not be using his personal cash, only an idiot would do that.
I haven' t actually concluded anything at all, its you telling me about my observations made from media reports and you for whatever reason, making assumptions that I have made conclusions.which is rather strange. To arrive at a conclusionmeans waiting until such times as experts deeply involved and investigating arrive at their conclusions.

Edited by crankedup on Thursday 20th October 16:48

johnfm

13,668 posts

249 months

Thursday 20th October 2016
quotequote all
Adrian W said:
FN2TypeR said:
Oh look it's the Guardian again I hope he starts suing MP's who have slandered him, this really is a lynching, and are they going to treat all of the other executives of companies in the same way,

lets start with the banks, Libor,PPI etc etc
I don't think he can while they make statements in parliament.

In any event, he has to prove the statements are false and that they cause damage to his reputation. If his reputation is that he is a bit dodgy, then saying that he is a bit dodgy doesn't damage that reputation.

basherX

2,464 posts

160 months

Thursday 20th October 2016
quotequote all
sidicks said:
The scheme was funded - regulations do not permit a massive surplus to be built up, and no-one could predict what would happen to interest rates. As I explained the BHS scheme is not unique, hundreds of schemes suffered in exactly the same way.
O/T, and purely out of idle interest, but which regulations "do not permit a massive surplus to be built up"? A scheme-specific provision or something that applies more generally?

sidicks

25,218 posts

220 months

Thursday 20th October 2016
quotequote all
basherX said:
O/T, and purely out of idle interest, but which regulations "do not permit a massive surplus to be built up"? A scheme-specific provision or something that applies more generally?
Historically HMRC forced companies to take payment holidays to avoid building up excessive funds 'tax free'. Not sure that would be an issue now though!

Adrian W

Original Poster:

13,848 posts

227 months

Thursday 20th October 2016
quotequote all
sidicks said:
Historically HMRC forced companies to take payment holidays to avoid building up excessive funds 'tax free'. Not sure that would be an issue now though!
Sidicks, shurely the names of the trustees must be published somewhere? I don't get why they haven't been wheeled out to support on of the sides

basherX

2,464 posts

160 months

Thursday 20th October 2016
quotequote all
sidicks said:
Historically HMRC forced companies to take payment holidays to avoid building up excessive funds 'tax free'. Not sure that would be an issue now though!
Ta. I don't think that, strictly speaking, that applies anymore. However, as you suggest, "trapped surplus" is one of those quaintly theoretical risks that we'd really like to crystalise but sadly continually fails to. There is, as you probably know, a 35% charge on withdrawals (i.e. on wind up). I know in some quarters [ahem] that's viewed as a disincentive to take the risk of overfunding and this has been raised in various places as one of those things that could be changed (equalised with the prevailing rate of corporation tax): might, marginally, incentivise deficit repair with limited downside govt risk. But probably far too logical for the politicians.

sidicks

25,218 posts

220 months

Thursday 20th October 2016
quotequote all
Adrian W said:
sidicks said:
Historically HMRC forced companies to take payment holidays to avoid building up excessive funds 'tax free'. Not sure that would be an issue now though!
Sidicks, shurely the names of the trustees must be published somewhere? I don't get why they haven't been wheeled out to support on of the sides
Without seeing the minutes of Trustee meetings it's hard to put too much blame on the Trustees.

sidicks

25,218 posts

220 months

Thursday 20th October 2016
quotequote all
basherX said:
Ta. I don't think that, strictly speaking, that applies anymore. However, as you suggest, "trapped surplus" is one of those quaintly theoretical risks that we'd really like to crystalise but sadly continually fails to. There is, as you probably know, a 35% charge on withdrawals (i.e. on wind up). I know in some quarters [ahem] that's viewed as a disincentive to take the risk of overfunding and this has been raised in various places as one of those things that could be changed (equalised with the prevailing rate of corporation tax): might, marginally, incentivise deficit repair with limited downside govt risk. But probably far too logical for the politicians.
Agreed.

audidoody

8,595 posts

255 months

Thursday 20th October 2016
quotequote all
The irony of one Labour MP (Skinner) comparing him to an ex-Labour MP (Maxwell) is delicious indeed.

Camlet

1,132 posts

148 months

Thursday 20th October 2016
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There are countless Greens out there. They come in all shapes and sizes, all backgrounds.

They may start out doing the right thing but success creates an illusion.

They end up believing their own BS.

Their advisors make too much money blowing smoke instead of telling the Greens they're wrong. Tough.







JNW1

7,711 posts

193 months

Thursday 20th October 2016
quotequote all
sidicks said:
JNW1 said:
Sorry but he did continue to take money out of the business after the pension schemes went into deficit!
You keep saying that - I'll believe when you show me the evidence! And why did the Trustees let that happen?!

JNW1 said:
You're right when you say as owner of the business he was responsible for ensuring the pension scheme was funded adequately; however, it had been heavily in deficit for some considerable time prior to the sale to Chappell's company so what was Green doing for all those years?
Paying the recovery contributions, as agreed with the Trustees (over 20 years). There wasn't the business cash flow to pay any more, as far as I'm aware...

JNW1 said:
The recovery plan he eventually came up with was far from satisfactory and to me it's not acceptable to take hundreds of millions out of a company in the good times - thereby depriving it of funds that could be used for a rainy day - and then throw your hands up when it starts raining and say the money's not there to correct something like a pension scheme deficit within a reasonable timescale. If Green had shown some positive intent to get to grips with the pension deficit in the period 2009 to 2015 he could have probably avoided all this bad publicity; however, as it is he just looks like he's been content to let the deficit sit there and then palm it off to someone who frankly didn't appear to know the first thing about running a business.
The scheme was funded - regulations do not permit a massive surplus to be built up, and no-one could predict what would happen to interest rates. As I explained the BHS scheme is not unique, hundreds of schemes suffered in exactly the same way.

JNW1 said:
You seem to be implying continually that Green didn't continue to take money out of the business after the pension schemes went into deficit and that he took reasonable action to ensure the funding of the pensions schemes was adequate once the deficits became apparent; I'd disagree on both counts!
I'm still waiting for you to prove what you are claiming!
Green and his family companies continued to take money out of BHS well after the pension scheme first moved into deficit; post-2004 not much of that money was taken in the form of dividends but over his period of ownership significant rent payments and management charges were levied by Green family companies and in total (dividends, rent, fees) the FT suggest they amounted to £1.2 billion. Clearly Green did also inject substantial money into BHS via Arcadia but nevertheless he was a net taker over the time he owned the company (to the tune of several hundred million). Why did the Trustees allow that to happen? Well, he wasn't taking money direct from the pension scheme so I'm not sure what they could have done to stop him?

I think a point also worth noting is that although BHS was profitable when Green took most of his dividends in the period 2001-2004, the level of those payments (£423m) actually exceeded the profit (£317m) and therefore he was using retained profit from prior years to fund his dividend payments; nothing illegal in that but surely not especially prudent or sustainable to distribute more than you're earning? I think it also follows that had some of those appropriations not taken place there would have been more funds available to cover potential problems in the future (such as a pension scheme moving into deficit). And just on that point, figures from the FT suggest the fund actually moved into deficit at the end of 2004 (i.e. well before the financial crisis hit in late 2008); of course the financial crash made things much worse but the trend in the pension scheme funding at BHS was established long before that came along and hence it doesn't really wash to try to blame it all on general market conditions.

In terms of the scheme being funded, it would appear it was only funded fully for a small proportion of Green's ownership (the first few years after acquisition) and the recovery plan eventually put in place to address the substantial deficit was poor. Perhaps by then it was the best BHS could afford but perhaps BHS could have afforded more if it wasn't paying top-end rents and management fees to other Green companies? Also, perhaps the deficit would have been smaller if the company had had more by way of retained earnings to help cover the shortfall; instead, a large proportion of those retained earnings went to fund huge dividend payments in the years immediately after Green acquired the business (and hence when the rainy day arrived the umbrella was full of holes).

So I'm afraid I'm still of the view that Green comes out of this with little or no credit; I'm not saying he acted illegally but I think he acted very much with his own short-term self interest in mind and didn't give a monkeys for the BHS pensioners. Given his enormous wealth - several hundred million of which has come from BHS - he could have been more generous in his approach to addressing the pension scheme problem but I'm still left with the impression he'd have done the bare minimum had it not been for the public outcry.

Tryke3

1,609 posts

93 months

Thursday 20th October 2016
quotequote all
sidicks said:
JNW1 said:
Sorry but he did continue to take money out of the business after the pension schemes went into deficit!
You keep saying that - I'll believe when you show me the evidence! And why did the Trustees let that happen?!

JNW1 said:
You're right when you say as owner of the business he was responsible for ensuring the pension scheme was funded adequately; however, it had been heavily in deficit for some considerable time prior to the sale to Chappell's company so what was Green doing for all those years?
Paying the recovery contributions, as agreed with the Trustees (over 20 years). There wasn't the business cash flow to pay any more, as far as I'm aware...

JNW1 said:
The recovery plan he eventually came up with was far from satisfactory and to me it's not acceptable to take hundreds of millions out of a company in the good times - thereby depriving it of funds that could be used for a rainy day - and then throw your hands up when it starts raining and say the money's not there to correct something like a pension scheme deficit within a reasonable timescale. If Green had shown some positive intent to get to grips with the pension deficit in the period 2009 to 2015 he could have probably avoided all this bad publicity; however, as it is he just looks like he's been content to let the deficit sit there and then palm it off to someone who frankly didn't appear to know the first thing about running a business.
The scheme was funded - regulations do not permit a massive surplus to be built up, and no-one could predict what would happen to interest rates. As I explained the BHS scheme is not unique, hundreds of schemes suffered in exactly the same way.

JNW1 said:
You seem to be implying continually that Green didn't continue to take money out of the business after the pension schemes went into deficit and that he took reasonable action to ensure the funding of the pensions schemes was adequate once the deficits became apparent; I'd disagree on both counts!
I'm still waiting for you to prove what you are claiming!
Isnt that what the mps looked into and not found much evidence for wrong doing, but still took the approach that somehow he is partly responsiblr for the pension deficit and probably for the bankruptcy of the business? You claim he done nothing wrong but it seems he has question to answer and the answer are basically see no evil hear no evil, while spending millions on yachts and avoiding taxes aggresively. You claim he is innocent, yet everyone else understood the deal he done, its been common practice for many years, take all the cash out the company, load it with debts and if it fails the goverment will pick up the pension bill, if it doesnt happy days. We understand even if we cant be bothered to actually look for evidence to present on a internet forum :thumbsup:

Rovinghawk

13,300 posts

157 months

Thursday 20th October 2016
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Eric Mc said:
Yes - the words "abdication of responsibility" come to mind.
Did "abrogation of responsibility" not seem more appropriate?

sidicks

25,218 posts

220 months

Thursday 20th October 2016
quotequote all
Tryke3 said:
Isnt that what the mps looked into and not found much evidence for wrong doing, but still took the approach that somehow he is partly responsiblr for the pension deficit and probably for the bankruptcy of the business? You claim he done nothing wrong but it seems he has question to answer and the answer are basically see no evil hear no evil, while spending millions on yachts and avoiding taxes aggresively. You claim he is innocent, yet everyone else understood the deal he done, its been common practice for many years, take all the cash out the company, load it with debts and if it fails the goverment will pick up the pension bill, if it doesnt happy days. We understand even if we cant be bothered to actually look for evidence to present on a internet forum :thumbsup:
I've never claimed he is innocent. I've simply claimed that so far there is a lack of evidence that he is guilty of anything apart from poor management.

sidicks

25,218 posts

220 months

Thursday 20th October 2016
quotequote all
JNW1 said:
Green and his family companies continued to take money out of BHS well after the pension scheme first moved into deficit; post-2004 not much of that money was taken in the form of dividends but over his period of ownership significant rent payments and management charges were levied by Green family companies and in total (dividends, rent, fees) the FT suggest they amounted to £1.2 billion. Clearly Green did also inject substantial money into BHS via Arcadia but nevertheless he was a net taker over the time he owned the company (to the tune of several hundred million). Why did the Trustees allow that to happen? Well, he wasn't taking money direct from the pension scheme so I'm not sure what they could have done to stop him?
Company pays rent on buildings they don't own is hardly a scandal or worthy of comment. Thousands of businesses do exactly that. Given the scale of BHS, it does not surprise me that the rent on the substantial number of properties they occupied (but did not own) would also be substantial.

Now if the rent paid was double or more than the market rent, then there is a story to be had. If experts think that it was in line with (at the upper end of) market rents then this isn't really relevant.

The company would be paying rent to someone!


JNW1 said:
I think a point also worth noting is that although BHS was profitable when Green took most of his dividends in the period 2001-2004, the level of those payments (£423m) actually exceeded the profit (£317m) and therefore he was using retained profit from prior years to fund his dividend payments; nothing illegal in that but surely not especially prudent or sustainable to distribute more than you're earning? I think it also follows that had some of those appropriations not taken place there would have been more funds available to cover potential problems in the future (such as a pension scheme moving into deficit). And just on that point, figures from the FT suggest the fund actually moved into deficit at the end of 2004 (i.e. well before the financial crisis hit in late 2008); of course the financial crash made things much worse but the trend in the pension scheme funding at BHS was established long before that came along and hence it doesn't really wash to try to blame it all on general market conditions.

In terms of the scheme being funded, it would appear it was only funded fully for a small proportion of Green's ownership (the first few years after acquisition) and the recovery plan eventually put in place to address the substantial deficit was poor. Perhaps by then it was the best BHS could afford but perhaps BHS could have afforded more if it wasn't paying top-end rents and management fees to other Green companies? Also, perhaps the deficit would have been smaller if the company had had more by way of retained earnings to help cover the shortfall; instead, a large proportion of those retained earnings went to fund huge dividend payments in the years immediately after Green acquired the business (and hence when the rainy day arrived the umbrella was full of holes).

So I'm afraid I'm still of the view that Green comes out of this with little or no credit;
I fully agree.

JNW1 said:
I'm not saying he acted illegally but I think he acted very much with his own short-term self interest in mind and didn't give a monkeys for the BHS pensioners. Given his enormous wealth - several hundred million of which has come from BHS - he could have been more generous in his approach to addressing the pension scheme problem but I'm still left with the impression he'd have done the bare minimum had it not been for the public outcry.
Also agree.