Field presses FRC for publication of BHS audit

Written by Natalie Tuck
08/08/18

Work and Pensions Committee chair Frank Field has queried the Financial Reporting Council on the release date of its report on PwC’s audit of collapsed retailer BHS.

In June, the High Court ruled against a request by former BHS owner Philip Green to block the FRC from publishing the full details of the report, which contains “serious criticisms” of the Taveta management – Green’s holding company.

Over a month later the report has still not been published, and Field has questioned why. FRC chief executive Stephen Haddrill, in a letter dated 12 July, told Field that he intended to publish the report “as soon as possible”.

As a result, Field has written to Haddrill to ask about the processes FRC follows when publishing a report, and the time taken at each stage. In particular, he has asked whether Taveta has had any involvement in the process, and the report is expected to be published.

He has also asked whether the Insolvency Service has had any access to material
held by the FRC, including the settlement documents.

“The chief executive of the Insolvency Service confirmed to us in a letter of 16 July that the IS had asked the FRC to make available to it material relating to the conduct of directors of the Taveta group,” Field wrote.

The Insolvency Service has previously told the Work and Pensions Committee that it may reopen an investigation into the former BHS directors in light of the FRC report.

Following the report, the FRC sanctioned PwC and one of its former partners, Steve Denison, as a result of BHS’s 2014 audits. Denison was given a £500,000 fine, and has been banned from undertaking any audit work for 15 years, as well as being given a “severe reprimand”. Denison was the auditor for BHS from 2009 until when it was sold to Dominic Chappell in 2015.

PwC was handed a £10m fine and told to monitor and support its Leeds Audit Practice and provide detailed annual reports about that practice to the FRC for the next three years.

BHS was infamously sold for £1 in March 2015 by Philip Green to Dominic Chappell but collapsed thirteen months later with a pension deficit of around £570m.

Following its investigation into BHS, The Pensions Regulator said: “The main purpose of the sale of BHS was to postpone BHS’s insolvency to prevent a liability to the schemes falling due while it was part of the Taveta group of companies ultimately owned by the Green family, and/or that the effect of the sale was materially detrimental to the schemes.”

Related Articles

Cautious optimism in a challenging world
Matthew J. Bullock, Investment Director, Global Multi-Asset Strategies, Wellington Management, meets Francesca Fabrizi to discuss how multi-asset strategies can help investors

Latest News Headlines
Most read stories...
World Markets (15 minute+ time delay)