Business Secretary Alok Sharma has asked the insolvency watchdog to examine whether the conduct of the trustees of Sir Philip Green’s fashion empire has caused problems for the group’s pension fund.
The Arcadia Group, which owns mass-market brands such as Topshop, Dorothy Perkins and Burton, fell into administration on Monday, leaving an estimated pension deficit of £ 350million.
Within three months of their appointment, directors must submit a report to the Insolvency department on the behavior of the group’s executives. The agency then examines whether there is a need for a further investigation.
In a letter to Dean Beale, Managing Director of the Insolvency Department, Sharma said: “Given the importance of this matter and its implications for thousands of suppliers, retirees and employees, would be grateful if you would read this report carefully.
“If you decide that there are grounds for investigation, I would ask that she examine not only the conduct of the directors immediately before and during the insolvency, but also whether any action by the directors harmed creditors or the plans. of retirement. ”
Boris Johnson also highlighted Sharma’s action in parliament, adding: “We will do all we can to restore the main streets of this country.”
Arcadia’s pension fund is being assessed for membership in the Pension Protection Fund, the industry-backed lifeboat that pays retirees from collapsed businesses.
Under the lifeboat, members who have not reached the normal retirement age of a pension plan before their employer’s start date could lose 10% of their benefits, even if they ‘they have already started to collect the pension.
Last year Green’s wife Tina, who lives in Monaco and is the ultimate owner of Arcadia, pledged an additional £ 100million into the group’s three-year pension plan and signed property rights worth £ 210 million.
Despite this deal, some fear that pension funding may be insufficient, as these real estate assets have likely lost value.
In addition, Tina Green has so far paid just £ 50million of the additional funding pledged. The company confirmed on Wednesday that final payment is guaranteed next year.