Former BHS owner Sir Phillip Green criticised Olswang and other advisers as he faced questions today (15 June) over the sale and contentious administration of the retailer.
Green’s Arcadia Group was advised by Linklaters when it sold BHS to Olswang client Retail Acquisitions for £1 back in 2015.
Today Green (pictured) gave evidence before the House of Commons Business, Innovation and Skills Committee and the Work and Pensions Committee as part of the ongoing inquiry into the sale to Retail Acquisitions which was owned by former racing car driver Dominic Chappell, who had been declared bankrupt at least twice.
During the hearing, Green said that experienced partners at Olswang and accountants Grant Thornton had helped give Chappell ‘credibility’ and were still ‘knee-deep’ in the deal days before the administration.
Green told the committee: ‘I took personally comfort from Grant Thornton and Olswang for representing this guy, as being reputable for being well-regarded firms.’
Green added that he took a ‘great deal of comfort’ that Olswang and Grant Thornton were representing Chappell, even though he suspected ‘they didn’t know the guy from a hole in the wall’ before the deal began.
During the hearing Green conceded that he shouldn’t have sold BHS to Chappell, but insisted that the advisers were to blame.
He also accused Olswang of holding £7m from the purchase of one BHS’s properties in a client account, which he claims breached covenants on that sale.
Green said for the sale of BHS asset North West House for £32m in 2015, only £25m turned up in the BHS accounts. Green said he was told the £7m had been transferred to the Bank of China to secure a £100m loan.
He added: ‘The £7m never materialised. It only transpired at the end of this whole process that the £7m remained in the Olswang bank account. Twenty-four to 48 hours after this covenant was signed £7m of the funds did not arrive in the cash flow.’
Green claimed £1.2m went to Olswang, £1.2m went to Grant Thornton, £1.8m went to Chappell, and several hundred thousand went to each of the gentlemen [Chappell’s advisers]’.
Late last month legal advisers on the transaction, including Linklaters corporate partner Owen Clay, and Olswang general counsel Stephen Hermer were questioned over their roles on the deal. Linklaters has complained about MPs questioning during the hearing in a letter which criticised committee leader Frank Field and defended its decision not to answer a question due to legal privilege.
Other law firms on the deal which were questioned by MPs for the inquiry included Nabarro, which advised Green’s firm Taveta Group on pension aspects and Eversheds which advised the trustees of the BHS pension scheme.
A spokeswoman for Grant Thornton said: ‘Grant Thornton’s only role in reference to the sale of BHS was to provide financial due diligence on BHS for Retail Acquisitions. At no point did we make representations to the client on whether BHS was a sensible investment decision or not, nor did we ever provide a reference for Chappell or anyone else involved with Retail Acquisitions.’
Olswang had not responded to a request for comment at press time.
victoria.young@legalease.co.uk