Philip Green

[Baileysforchristmas]

AIBU to think Philip Green should put his hand in his pocket to help his staff who will now loose their jobs? Especially when I have just read he gave his wife 1.2 billion, which she paid no tax on because she lives in Monaco

2005: Arcadia pays out a £1.3billion dividend, £1.2billion of which goes to Sir Philip's wife Tina, who lives in Monaco so does not have to pay UK tax.

@hamstersarse

Perception is so key here isn't it

I see the way in which Ryan Air operates it's fee structures as really freeing. I pay £19.99 for a cheap flight and can chose whether I pay for bags, meals, extra legroom. I don't get that choice on many traditional airlines like BA, it's just automatically charged.

Others see the charges as a way to make money.

I agree - it's like twats who say speed cameras are just money making.

Yes there is something attractive about him I agree

The law needs to be changed to stop "businessmen" like Green from stripping the wealth from companies for personal gain and walking away with their wealth intact while the employees are left with no job and a hole in the pension scheme.

@Thepilotlightsgoneout

Tradesman like sparkies and plumbers set up Ltd companies so they don’t lose their house if a customer sues them.

Many also set themselves and their spouses up as directors of the Ltd company and pay themselves dividends rather than a salary, to avoid higher tax.

Many people pay the self-employed cash in hand to avoid paying VAT.

I never hear anyone complain about any of that.

But the likes of Green and Lewis Hamilton are doing exactly the same thing, writ large. The sums involved are different but it’s the same principle.

And it apparently makes them terrible people!

Lots of people on here have spoken against your first three examples on MN regularly so not sure why think no-one complains. Green isn't the same as Lewis Hamilton - only one of them has personally appropriated peoples pensions.

The Spice Girls haven't fucked up anyone's pensions as far as I know.

But they did avoid tax by becoming non-resident, which the poster I responded to said that the Greens should have been prosecuted for.

Do we know for sure that Philip Green has acted illegally or contrary to corporate governance in relation to the Arcadia pension scheme? If so, please will you post a link?

DH used to work for Arcadia and has a pension with them. Thankfully it's not huge but I don't understand why there is a shortfall in the pension scheme. I though legislation had changed years ago re pensions to mean the pension pot had to be separate from company finances exactly so this couldn't happen. Between BHS and Arcadia the shortfall is not much less than a billion pounds. How has PG been able to extract any money out of those businesses over the years with any sort of a pension shortfall???

Read what you have written. Then read it again. Can you see that you have answered your own question? The pension fund is separate from the corporate body. So extracting funds from the business has nothing to do with the pension fund, provided that the company has been making the agreed contributions. If the pensions are defined benefit in nature, which only some of them will be, the company has some obligations to ‘top up’ the fund, but the values of the assets backing the scheme change all the time.

Can you think of a reason why the assets backing the scheme might have fallen in value during 2020? Here’s a clue: begins with ‘C’.

Legislation change needs to happen to stop this kind of thing from happening.

What ‘kind of thing’? What precise actions of Philip Green’s, in relation to the Arcadia pension fund, are you opposed to?

Legislation already exists to prosecute directors who contravene the Companies Act and other legislation.

Why would people put money away in a pension that has no guarantee of ever paying out, particularly beyond the absolute minimum to get the company contribution.

Ever heard of the pension protection fund?

Incidentally, I don’t think much of Philip Green and his family, but the calls to adjust legislation for him, and him alone, so that some sort of mob justice can be enacted, are barmy.

Yes I agree you can’t just make an example of Philip Green, the whole system needs changing, including getting rid of the Royals, especially Prince Andrew.

I didn't say the greens should be prosecuted for being non resident - it's the pretence that the business is the wife's that's the tax evasion @Iamthewombat

And passing ownership - pretending that a family member is the actual owner - is very much evasion and should have been prosecutable

Is it? Husband/wife transfers of assets happen all the time in the U.K. and are not classed as evasion.

Tina Green is the majority shareholder of Taveta Investments, which owns Arcadia amongst other things.

I didn't say the greens should be prosecuted for being non resident - it's the pretence that the business is the wife's that's the tax evasion

Here is what you wrote:

Oh yes, tax. He put everything in his wife's name so he could avoid UK taxes - why HMRC didn't prosecute him at the time for that egregious tax evasion I don't know.

How could he have avoided U.K. tax unless his wife was non-resident, and was resident in a low tax jurisdiction?

See above for the rules on inter-spouse transfers. If that’s your real question, that makes it even easier to reply. You can’t prosecute people for using a perfectly legal and commonly-used device. It’s one of the tax advantages of being married.

@hamstersarse

Unfortunately we need entrepreneurs like Green in our economy.

They create jobs. In fact, it looks like 24,000 of them in Phillip Green's case.

Disincentivising innovation and the building of business is futile and harmful.

It's really childish also.

Have you looked at Green's modus operandi?

He makes money by deliberately closing companies down. Having shifted huge dividends to his wife in a tax haven first.

I agree, liking people is neither here nor there, but it is possible for even the most unlikeable people to run businesses with a sense of responsibility to their workforce's pensions.

Building, expanding, investing in your business is one thing. Green operates like a vulture.

There's specific language about how transferring assets to reduce liability is against the law. It's very much prosecutable - that it hasn't been is a reflection on how much disinvestment there's been in the tax office, and how cosy the government has got with the robber-billionaires over the last few decades.

The trouble is the 1.2bn dividend was taken out by leveraging the company with a loan for 7 yrs. This was when the company was at its absolute peak which in retail everyone knows you can't maintain for decades. The problem was their wasn't enough money to pay the debt & invest back into the business eg pensions. Businesses need investment to keep growing.

What we don't and can't know is how the business would have fared without the pandemic.

It was struggling before Covid.

If there weren't a Philip Green, then Arcadia would have gone under long before now.

Er no, he wasn't responsible for their success, he just bought it when it was successful. There's a reason most of the staff including senior members left under him.

He should, but he won’t. He didn’t give a solitary fuck about the BHS pension scandal either. As long as he and his are happy on their yachts then it doesn’t concern him.

He looks like he acts. Gross.

Sir Philip Greed is a grotesque example of the unacceptable face of capitalism

I agree - but I think he’ll get his comeuppance.

He did love the status of being a Sir, they should take it back.

He took out a perfectly legal dividend 15 years ago when the pension fund was absolutely fine (if I've read the accounts correctly). Just because you don't like the man, you can't penalise someone for doing something legal.

I'd also note that creditors, including the pension scheme, voted through a company voluntary arrangement which the group complied with until Covid, so creditors were happy.

Pension funding is about the only liability you can get which looks into the future and a company that goes under when it operates a scheme will always be in deficit as the ongoing contributions stop but the pensions don't stop until the last scheme beneficiary dies.

So you really want politicians to have the power to pursue shareholders for whatever money they see fit just because they don't like them? Be careful what you wish for.

I note that no one is proposing chasing Debenhams shareholders and so on for money. Are they different as not an easy target?

Yes it was legal

Obviously limited liability status is needed to allow people to start businesses without risking everything.

However in this case he seems to have used the business for financial engineering / asset striping, as well a make zero investments, meaning the company would eventually go bust.

I would actually favour changing laws on financial engineering / asset striping, rather than asking him to make a contribution.

They should change the law, they should have done this the last time

Other countries have more regulation like more employee representation at board level so companies don't make decisions that screw over employees so easily.

It shouldn't be allowed to take 1.2bn as a majority shareholder snd private individual, while running a significant pension deficit.

It shouldn't be allowed to take 1.2bn as a majority shareholder snd private individual, while running a significant pension deficit.

At the time the deficit was probably low or non existent. The dividend shouldn't have been so big or taken solely from profits not a loan, that was the issue. I mean it was shitty business sense to think you would regularly make enough profit to grow the business & pay the dividend. The main strategy Philip had to grow the business was American expansion, which failed.

They should change the law, they should have done this the last time

Who are ‘they’, and which specific laws do you think should be changed?

Other countries have more regulation like more employee representation at board level so companies don't make decisions that screw over employees so easily.

Like France, you mean? The group I work for are in the process of pulling out of France because the regulatory environment makes it a less attractive place to do business. If you employ more than eleven people you have to set up a committee to consult employees any time you want to make a change to the business. Thus driving away businesses. That’s just what we need after Brexit and the virus, eh?

@Iamthewombat France must be devastated.