BY Itrat Bashir
Business Secretary Sajid Javid has ordered an immediate investigation into the circumstances surrounding British Home Stores (BHS) going into administration.
The Secretary has instructed the Insolvency Service to fast-track its investigation, which will also specifically consider the extent to which the conduct of the directors of BHS led to its insolvency, said a department’s spokesperson.
He also asked that the investigation look at not only the conduct of the directors at the point of its insolvency, but also of any individuals who were previously directors and whether their actions may have caused detriment to its creditors, this includes detriment to any employees who are owed money. They will also look at the pension protection fund.
Sajid Javid said that he has asked the Insolvency Service to bring forward its investigation rather than wait three months for the administrators to report before launching their inquiry. “This investigation will look at the conduct of the directors at the time of insolvency and any individuals who were previously directors. Any issues of misconduct will be taken very seriously,” he added.
According to the spokesperson, the Insolvency Service would normally wait for the conclusion of the administrator’s final report before commencing any investigation into a company entering administration. However, given the unique circumstances surrounding the BHS case, the Business Secretary has instructed the Insolvency Service to commence the investigation as soon as possible.
“Should the investigation conclude that one or more present or former directors have been involved in any misconduct, an application may be made to a court to ask that they be disqualified from acting as a director for a period between two and 15 years depending on the nature of their misconduct,” he added.
He also said that where conduct for which a person was disqualified took place subsequent to October 1, 2015, and caused a loss to creditors, an application could also be made to a court for an order that compensation be made for losses incurred.
Last week the UK’s leading retail store filed for administration after it failed to secure finances to overcome the losses. It is estimated that the stores’ debt stands around £1.3 billion, which include a pension’s deficit of £571 million. In 2000, the BHS was bought by billionaire Sir Philip Green for £200 million, which he later sold for just £1.
The BHS crisis has put the jobs of 11,000 people at stake, who work in 164 branches of BHS across the UK.
