Investigation in the fast lane
A spokeswoman for the Insolvency Service has told MPs that the “fast-tracked” investigation into the collapse of BHS may last until April 2019 because of the sheer amount of data compiled. According to Sarah Albon, the authority has now gathered all the evidence together and is working with forensic accountants to analyse it.
In total, of the 37 million electronic records received, the Insolvency Service has identified 1.4 million for review, which, added to the “complexities of the case” will take a long time, even with the accountants’ “specialised IT equipment”. However, Ms Albon told the Work and Pensions Committee that if the investigation finds grounds for disqualification against former directors, they would be in a position to commence proceedings “significantly earlier”.
The Insolvency Service can seek to bar individuals from serving as company directors for up to 15 years and in certain circumstances can be made to pay compensation for any losses incurred through their actions.
Forensic accountants are crucial to an insolvency investigation where there is any hint of assets being misappropriated by directors. Where this is suspected, they gather the evidence and then trace, recover and, if necessary, repatriate the assets. However, their investigations may equally find that no misconduct has occurred.
In 2015, former owner of BHS, Sir Philip Green, sold the chain for just £1 but it collapsed some 13 months later, leaving many of the 22,000 members of the store’s pension scheme facing cuts to their retirement income. There was also a deficit in the BHS pension scheme of £571m.
Author: Roger Isaacs, 13 February 2017