BHS administration costs have come in at £1.3m more than expected as MPs question a £35m ‘floating charge’ paid by Arcadia.
The original administrators to BHS, Duff & Phelps, now expects to charge just over £4m, compared with an original estimate of £3.5m.
FRP Advisory was appointed concurrent administrators, taking on exclusive responsibility for investigations into Sir Philip Green, Dominic Chappell and their respective companies, fellow directors and advisors. Its work will cost around £800,000.
Rt Hon Frank Field MP, chair of the committee, said: “The costs of the demise of BHS continue to spiral as the pensioners wait for Sir Philip Green to sort the pension fund.
“The PPF are already left scrabbling for a few pence in the pound from what is left of the wreckage of BHS.
“Meanwhile, Duff & Phelps, who were appointed by Sir Philip, have left with half a million more than they expected for doing substantially less of the administration than they expected.”
As of early December, Duff & Phelps had not completed work relating to the finalisation of liabilities and claims against various parties and agreeing the surrenders of leases and commercial disputes.
The remaining work will be conducted by FRP Advisory as liquidators of BHS.
Meanwhile, Field questioned the transference of a “floating charge”, put in place at BHS by Green’s Arcadia Group. Duff & Phelps transferred the charge to Linklaters last October.
The money was held in an escrow account by Linklaters and could not have been released to Arcadia without Duff & Phelps’ authorisation.
Field said: “The return of the £35m paid to Arcadia by Duff & Phelps vindicates the PPF’s decision to appoint administrators independent from Sir Philip.
“We are inquiring further into the circumstances of this transaction, which was not authorised by the co-administrator.
“If it was such a completely standard move, as Duff & Phelps claim, one wonders why it was reversed by the co-administrators as one of their first acts upon being appointed, and why the PPF seems to take a rather different view.”