It’s the kind of story we read with anguish and increasing frequency these days.
Whether in Barbados, Trinidad and Tobago, Canada, Britain or the United States, the tale of woe goes something like this: after decades of working hard, employees, who are looking forward to the day when they no longer work but receive pensions, are being told there isn’t any money to pay them.
How come?
Many employers and insurance companies responsible for the pensions didn’t adequately finance them, mismanaged annuities portfolios or even looted corporate finances.
In the past 60 years, that tragic tale or some elements of it, was recorded in Barbados and its eastern Caribbean neighbours. Alas, that depressing picture is now being painted in England where a billionaire business owner, Sir Philip Green, who was once portrayed as a possible saviour for the failed Four Seasons project in Barbados, is being soundly criticised for his business dealings and could even lose his knighthood if not his luxury yacht.
Sir Philip, who has spent a lot of time in Barbados (especially at Christmas) was often seen on Sandy Lane beaches. He reportedly mixed with the rich and famous.
Now in the wake of last month’s demise of a landmark 88-year-old department store chain on London’s high street, British Home Services (BHS) which Sir Philip once owned and served as its chairman is being seen across the UK as everything but a child of the Almighty.
Indeed, a report by the work and pension select committee of the House of Commons in London recently charged that he had undermined BHS financial structure, allegedly taking millions of pounds from it in order to finance a luxury lifestyle.
The problem probably comes down to this. BHS lost large sums in recent years.
In 2014 alone, its losses amounted to £41 million, up from the almost £20 million in 2013.
But that’s not all. Its pension fund was left with a gaping financial hole, estimated at half a billion pounds. What’s worse, upwards of 22 000 pension members, many of whom had worked at BHS for decades, lost their jobs and pensions when the chain recently closed all of its stores and went into liquidation.
Thousands of Bajans in London and Barbados can write chapter and verse about their shopping trips to BHS on London’s High Street.
As Frank Field, chairman of a House of Commons select committee sees the situation, Sir Philip’s reputation for “retail business acumen for which he received his knighthood” was in tatters. According to Field, Sir Philip and his family allegedly took a fortune out of the Acadia Group, a retail conglomerate that included BHS, Miss Selfridge, Top Shop, and Outfit and then reportedly failed to make good on a promise to fix the pension fund.
“He has a moral duty to act, a duty which he acknowledges,” said the MPs in their report.The parliamentarians alleged that BHS’ bankruptcy was the result of “a series of bad business decisions and personal greed”.
Interestingly, Sir Philip sold the retail chain to Dominic Chappell last year for one pound sterling and in about 15 months it went into bankruptcy.
The businessman is said to have assets amounting to more than £6 billion, including a £20 million Gulfstream private jet.
But what has angered many British parliamentarians and thousands of former BHS employees are published stories about Sir Philip’s latest yacht whose price tag was put at 100 million pounds sterling, his trips around the Greek Isles, French Riviera and Italy and his expensive holidays in Barbados.
When the parliamentary select committee interviewed BHS directors, top executives and lower level employees they found a shocking situation, one in which it is alleged that Sir Philip “systematically extracted hundreds of millions of pounds from BHS, paying very little tax and fantastically enriching himself and his family, leaving the company and its pension fund weakened to the point of inevitable collapse”.
That may explain why Sir Philip is facing threats of civil lawsuits and published media reports said he made a voluntary contribution of more than £300 million to close the gap, and also to make the threat of legal action go away.
But the tycoon, who is said to love Barbados, may have more to worry about. Britain’s Serious Fraud Office is reportedly taking a hard look at documents to see if there was “reasonable suspicion that a complex and serious fraud” occurred when BHS was owned by Sir Philip or Dominic Chappell to whom the billionaire sold BHS. As if that wasn’t bad enough, people in different parts of Britain are demanding that Sir Philip be stripped of his knighthood.
John McDonnell, the “chancellor” in the British Labour Party’s shadow cabinet, thinks Sir Philip should rectify the pension calamity, stating that “if Philip Green don’t do the right thing by members of the BHS pension fund, then he should have his knighthood removed”.
“And if he says he can’t afford it, then he should sell up his extra yacht.”
Clearly, the pension problem isn’t unique to BHS in much the same way that the CLICO nightmare wasn’t new to the Eastern Caribbean. Still, it cries out for a thorough study of the situation and for a legislative remedy to prevent such things from happening.
