I wrote last month that it was going to be hard for BHS to find itself a place on the high street.

Graham Ruddick

Well, we did not get to find out how hard. The appointment of administrators at BHS is a corporate scandal and will have ramifications for some time.

Ironically, it has taken the collapse of the company to get it back into the public consciousness. On Have I Got News For You, comedian Diane Morgan said news of BHS’s collapse was like finding out about the death of a distant relative you thought was long gone. Many people seem to have felt the same; BHS sales rose 80% year on year on the day the administrators were called in.

Sir Philip Green has become the most vilified business leader since Fred Goodwin, the disgraced former chief executive of RBS. Everybody in the retail, property and banking industry has a different view on Green. To some he is a bully; to others he is just straight-talking. To some he is a retail genius; to others his success is down to financial engineering.

My own view is that his bark is worse than his bite, but also that he is struggling to bring his retail empire into the 21st-century online world because it has too many stores.

Disastrous misstep

Whatever your view, it is difficult to defend his decision to sell BHS to Dominic Chappell. A headline in The Sunday Times put it succinctly: “Just what was Philip Green thinking?” For a man who prides himself on knowing everyone and everything, this was a disastrous misstep. Handing over a struggling retailer with 11,000 staff and a pension deficit that now stands at £571m to a two-time bankrupt was always likely to end in trouble.

If Green had sold the retailer to a responsible steward, he would not be getting bombarded with criticism for taking out millions of pounds from BHS through dividends, rent and management fees.

Of course, ultimately the financial state of BHS meant that credible buyers were few and far between. Christo Wiese, the South African tycoon, and investment firm Alteri had a look at buying BHS, but are thought to have asked for a dowry from Green to do a deal. Selling it for £1 was actually a decent deal for the tycoon, as has subsequently been shown.

MPs, the Pensions Regulator and other bodies will now spend weeks and months poring over the demise of BHS, and Green’s decision to sell it to Chappell.

BHS store

The demise of BHS is a “tragedy” Source: Shutterstock/Martin Good

The Pensions Regulator is serious about getting money from the billionaire tycoon to help fill the pension deficit, and believes it has a strong case. It will be fascinating to see how that pans out, because Green seems to be gearing up for a long battle. He took legal advice when selling BHS about whether or not the regulator could pursue him over the pension fund, and he was told not.

Amid the anger at Green, however, there are three things we should remember.

First, this is a company with almost 11,000 staff. They are now concerned for their jobs and their pensions. At least 10 parties have expressed an interest in buying BHS as a going concern, so the brand and jobs could still survive.

Second, regulators and the government need to take a long, hard look at themselves. Why was a two-time bankrupt without any retail experience or significant financial backing allowed to buy a large company without any need for pre-approval?

Should a billionaire or major company be allowed to sell a company or subsidiary with a major pension deficit? Why was a deal between Arcadia and pension trustees to fill the pension deficit over 23 years approved in 2012?

Shambles

Finally, the controversy over Green must not overshadow the management of BHS by Chappell and his consortium Retail Acquisitions. Having spoken to people at the heart of the retailer regularly over the past year, it is clear that it was, at best, a shambles.

Darren Topp, the chief executive of BHS, had a viable plan for reviving the business, which was backed by landlords and creditors, but he was not able to implement it. That is a tragedy.

The giant shadow of Green looms over this debacle, but Chappell cannot be allowed to hide behind it. Millions of pounds was paid from BHS to Retail Acquisitions in the past 13 months.

Chappell claims these were all justified, but MPs and regulators must demand that he explains them, as well as high-interest loans that were taken out against BHS property.

Graham Ruddick is senior business reporter at The Guardian

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