Tina Green, the ultimate owner of the failed retail group Arcadia, will pay a final £50m promised to its pension fund within days as the political outcry over the collapse of the company intensifies.
Lady Green, who is the wife of retail tycoon Philip Green, was set to make the payment in September 2021 as part of an agreement struck with The Pensions Regulator and the trustees last year.
However, in a statement on Wednesday, she said the payment would be made within the next 10 days, completing the £100m commitment made at the time. It is not clear how much of the £75m that Arcadia itself was due to contribute under the same arrangement has been paid.
Arcadia paused its monthly pension payments in March because of business disruption caused by Covid-19. Payments resumed in September, but will almost certainly cease after the group — which includes high-street brands such as Burton, Topshop and Evans — fell into administration on Monday, putting 13,000 jobs at risk.
The pension scheme has about 10,000 members and political pressure to make good the estimated £350m deficit is growing.
Earlier on Wednesday, Alok Sharma, the UK business secretary, wrote to The Insolvency Service urging it to examine the conduct of directors at Arcadia in relation to the pension deficit.
Administrators Deloitte are required to provide a report into the conduct of Arcadia directors within three months, in line with normal practice. Mr Sharma, writing to Dean Beale, chief executive of The Insolvency Service, urged the body to examine the Deloitte report “rigorously and expeditiously” as soon as it was received.
“If you decide that there are grounds for an investigation I would ask that it looks not only at the conduct of directors immediately prior to and at insolvency, but also at whether any action by directors has caused detriment to creditors or to the pension schemes.”
The pension scheme is being assessed for entry into the state Pension Protection Fund (PPF). Because of its large deficit, members who have not yet reached the normal retirement age could face a 10 per cent cut to their pensions. The trustees have declined to publicly disclose the scheme’s funding position.
Ed Miliband, shadow business secretary, told the House of Commons that it would be wrong if members of the pension fund had to “pay the price for Philip Green’s greed”.
He pointed out that Sir Philip had taken out a £1.2bn dividend from Arcadia — albeit 15 years ago — and paid it to his wife, who is resident in the tax haven of Monaco.
Mr Miliband called on the government to work with The Pensions Regulator to put pressure on Sir Philip to help members of the pension scheme.
Although Sir Philip has long been the driving force behind Arcadia, he has not been a director of the company since 2015. He is a director of some of its subsidiaries and is on the board of Taveta Investments, the main family holding company.
Arcadia has been run since 2009 by Ian Grabiner, a longtime associate of Sir Philip, while former hotel industry executive Andrew Coppel was appointed chairman last November.
Sir Philip was previously criticised by parliament’s Work and Pensions committee over the parlous state of BHS’s pension scheme, which was £571m in deficit when he sold the group for just £1 in 2015.
BHS collapsed a year later. After widespread political criticism and pressure from the regulator, Sir Philip contributed an additional £363m to the pension. The scheme has since been bought out by an insurer, safeguarding members’ benefits.
Paul Scully, a junior business minister, also told the Commons that he would convene a meeting of the Retail Sector Council on Thursday to discuss the current plight of Britain’s high streets.
Additional reporting by Josephine Cumbo
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