The BHS Tragedy: a depressing perspective

CormacButler 141The BHS Tragedy: a depressing perspective by Cormac Butler

Governments often attempt to reassure the public by holding some form of inquiry after financial scandals have emerged. Currently, Sir Philip Green is the latest to be caught up in a scandal. During his ownership of BHS he is alleged to have clocked up close to half a billion pounds in pension and other liabilities while simultaneously withdrawing similarly large sums in dividends for himself and his family. Unfortunately, like many other inquiries his grilling in the House of Lords will not amount to much. Politicians are simply to busy and inexperienced to take on the vested interests in the financial community.

In the 1980’s neither banks nor companies would never dare to pay a dividend from a company that had clocked up liabilities they could not afford to pay. A basic company rule is that dividends can only be paid from solvent companies. Thanks to deliberate confusion by vested interests in the financial world, company law is being manipulated so that bankers and company directors now can line their pockets with bonuses and dividends financed from artificial profits before walking away leaving employees and the government to clean up the mess. Unfortunately, this is the rather depressing conclusion that a proper investigation can only reach. However, like the Irish Banking Enquiry and previous House of Lords attempts, the current committee will continue to avoid the elephant in the room.