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Fashion Jobs
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Published
May 3, 2016
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Britain to fast-track investigation into BHS collapse

By
Reuters
Published
May 3, 2016

The British government on Tuesday ordered an investigation into the circumstances surrounding department store retailer BHS's collapse into administration last week.



Business Secretary Sajid Javid has instructed the Insolvency Service to fast-track its inquiry, which will also specifically consider the extent to which the conduct of the directors of BHS led to its insolvency.

BHS was placed into administration, a form of creditor protection, by owner Retail Acquisitions on April 25, putting the 88-year-old retailer at risk of disappearing from British shopping streets and putting 11,000 jobs at risk.

BHS is already being investigated by Britain's pensions regulator and British lawmakers. Both the cross-party Work and Pensions Committee and the Business, Innovation and Skills Committee have launched inquiries.

Separately on Tuesday a spokeswoman for the Work and Pensions Committee said former BHS owner Philip Green, the billionaire retailer, has agreed to appear before the lawmaker committees.

"I have asked the Insolvency Service to bring forward its investigation rather than wait three months for the administrators to report before launching their inquiry," Javid said.

"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."

The Insolvency Service would normally wait for the conclusion of the administrator's final report before commencing any investigation into a company entering administration.

Should the probe find that directors were involved in any misconduct the service can apply to a court to ask that they be disqualified from acting as a director for up to 15 years.

Green sold BHS to Retail Acquisitions, a collection of investors, for a nominal sum of a pound in March last year.

He had bought it for 200 million pounds ($291 million) in 2000 and when it was profitable paid out several hundreds of millions of pounds of dividends to his family.

With a pension deficit of 571 million pounds, the pensions regulator is probing whether BHS's previous owners sought to avoid their obligations.

Green could not be immediately reached for comment.

$1 = 0.6874 pounds

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