Top Law Firm To Scrutinise Ex-BHS Directors

A leading City law firm has been drafted in to aid an inquiry that will scrutinise the conduct of former BHS directors in the period leading up to the high street chain’s demise.

Sky News has learnt that Jones Day was appointed this week by FRP Advisory, which was itself recently handed the role of joint administrator to BHS at the request of the retailer's biggest creditor.

City sources said on Thursday that Jones Day would play a key role in helping FRP probe transactions involving BHS both before Sir Philip Green sold the company in an ill-fated deal worth just £1 last year.

The news of Jones Day's appointment comes just over a week before the final BHS stores are scheduled to close for the last time.

Sky News revealed last month that the remainder of BHS's 164 shops would shut on August 20, increasing the redundancy toll from the company's collapse to more than 10,000.

A coruscating report by two committees of MPs (BSE: MPSLTD.BO - news) concluded that Sir Philip bore much of the responsibility for BHS's travails after opting to sell it to a "manifestly unsuitable" buyer in the shape of Dominic Chappell, a former bankrupt.

Sir Philip is now under intense pressure - led by the co-chairs of that parliamentary inquiry - to fulfil a commitment to plugging the vast deficit in BHS's pension schemes.

To do so, he will have to write a cheque for several hundred million pounds, although the precise structure of a rescue deal for pensioners could take months to finalise.

The tycoon, who owns TopShop and other leading high street names, has responded furiously to criticism from the Labour MP Frank Field, accusing him of jeopardising the retirement savings of thousands of BHS pensioners.

It has emerged that the Cabinet Office is reviewing Sir Philip's knighthood, which could be stripped from him if the move is recommended by the forfeiture committee.

During the course of their inquiry, the MPs exposed a web of property transactions involving BHS, Green family companies and other entities, the opacity of which was also criticised in their final report.

FRP was appointed at the instigation of the Pension Protection Fund, BHS's biggest unsecured creditor, to work alongside Duff & Phelps, which has handled the administration since April.

The more recently appointed administrator is also likely to oversee the liquidation of BHS after the final stores have closed.

The PPF has estimated that the cost to it of meeting BHS pensioners' retirement payments at the discounted level it provides would be at least £275m, although that figure is certain to have risen in the wake of last week's Bank of England rate cut.

Jones Day and FRP declined to comment.