Pensions  

Field puts pressure on FRC to publish BHS report

Field puts pressure on FRC to publish BHS report

The chairman of the work and pensions select committee has written to the Financial Reporting Council demanding to know why it has not published its report on the audit of BHS.

Frank Field wrote to FRC chief executive Stephen Haddrill saying more than three weeks had passed since Mr Justice Nicklin gave his permission for the FRC to publish the report and said its contents "have still not seen the light of day".

Last month PwC was handed a record fine of £6.5m from the council for its auditing of BHS before its sale for £1 in 2015.

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Taveta, the former owner of BHS, attempted to prevent the FRC from publishing its report by putting an injunction on the council, but the High Court denied its request.

In his letter to Mr Haddrill, Mr Field wrote: "In your letter of 12 July, you said that the FRC intended to publish the settlement documents 'as soon as possible'.

"Nevertheless, more than three weeks later, there is still no firm date for publication. The FRC gained the court’s permission to give the select committee a copy of your original report.

"It is therefore open to the committee, when it meets again in September, to consider whether to report that document to the House of Commons so that it can be published. That is of course a decision for the committee to take, but I would be grateful if you would let us know whether you would have any objection to our publishing your report in this way."

BHS went into administration in April 2016, leading to an investigation being carried out by The Pensions Regulator (TPR) after workers’ pension funds were found to be at risk.

An independent pension scheme for 19,000 formers BHS workers was funded after a £363m settlement was reached with Sir Philip Green.

An investigation carried out by the Insolvency Service saw charges being brought against Dominic Chappell, director of the company that bought BHS from Taveta for £1, and two of his colleagues.

The service found insufficient evidence to justify disqualification proceedings against Sir Philip Green of other directors at Taveta.  

Steve Denison, the PwC partner who conducted the audit into the pre-sale audit of BHS a fine of £325,000 but this was reduced on account of an early settlement.

In an attempt to justify suppressing parts of the FRC’s report, Taveta’s public submission said the regulator’s findings contain "serious criticisms" of the company, its directors and its employees and potentially "irreparable harm the claimant and its directors and employees".

Taveta have said that a publishing of the report would have "a very real potential to damage the reputation of the individuals concerned, in particular Paul Budge as group director and Ms Hague as group financial controller".

The FRC’s public submission describes the discredited audit carried out on financial statements prepared by BHS management.

The FRC’s submission states: "After investigation, the executive counsel concluded that the basis of the going concern statement was obviously insufficient in the face of the pending sale; the assumptions behind the impairment review were not supported by evidence obtained by PwC and were not reasonable".