Jessica Fino 8 Aug 2018 11:35am

MPs pressure FRC to publish BHS report

The Financial Reporting Council (FRC) has been pressured again to publish its report into PwC’s audit of the collapsed retail chain BHS

Frank Field, chair of the Work and Pensions Committee, wrote to the FRC’s CEO Stephen Haddrill, asking when the report would be released.

The regulator was expected to publish its finding last month, after a gag attempt from Sir Philip Green failed in the High Court.

Green, owner of investment company Taveta, tried to stop the publication of parts of the report last month, arguing that “specific parts of the report” should not be published as these contained details that could cause Taveta, its directors and employees “serious and potentially irreparable harm”.

Mr Justice Nicklin ruled that the court was “not satisfied that Taveta’s case was ‘exceptional’ and so its application for an injunction was refused”.

One month later, Field lamented the report “has still not seen the light of day”.

He wrote, “In your letter of 12 July, you said that the FRC intended to publish the settlement documents ‘as soon as possible’. Nevertheless, more than three weeks later, there is still no firm date for publication.”

Field suggested that the Work and Pensions Committee could decide to give the report to the House of Commons next month, and asked if the FRC “would have any objection” to the publication of the report this way.

He added that if the regulator could not provide a firm date for the publication of the report then it should give an explanation of why.

A FRC spokesperson said, “We will respond to Frank Field in due course. The FRC wishes to publish the report in the public interest. We are digesting the detail of the judgement.”

The PwC audit in question concerned retail chain BHS’ 2014 financial statements. The chain entered administration and closed all of its stores in 2016, resulting in the loss of 11,000 jobs and a £571m pensions deficit, however PwC had given it a clean bill of health just five days before the sale.

PwC was subsequently fined a record £6.5m and former PwC partner Steve Denison received a 15-year ban on working as an auditor and a fine of £350,000. Both admitted to misconduct.

It has since emerged that Denison only spent two hours working on the completion of the BHS audit and backdated his audit opinion.

MPs have concluded that Green is ultimately to blame for the collapse of BHS after he rushed to offload the troubled retailer, but they also recognised the failings of the advisers involved in the transaction.

The Work and Pensions Committee said at the time that the collapse of BHS was “the unacceptable face of capitalism” and all those who got rich or richer from the company’s failure are culpable.