High Court set to rule on Sir Philip Green’s FRC challenge

Sir Philip Green BHS audit

A High Court judge is poised to hand down his ruling on Sir Philip Green’s bid to restrict the publication of a report by the Financial Reporting Council on a BHS audit.

Last week, the retail mogul’s holding company Taveta Investments sought a judicial review of a report on PwC’s audit of BHS, which effectively launched his court battle with FRC.

Justice Nicklin is expected to deliver his judgment at 2pm today.

The FRC recently handed PwC a £10 million fine for its audit of BHS, where it gave it a clean bill of health for the year ending August 30, 2014.

PwC audit partner Steve Denison also signed off the BHS accounts as a “going concern” days before Green sold it to former bankrupt Dominic Chappell for just £1 in March 2015.

PwC stepped down as BHS’s auditor after the sale.

The FRC also sanctioned Denison and fined him £325,000, and he also voluntarily gave an undertaking to remove his name from the register of statutory auditors.

Meanwhille, PwC’s historic fine has been reduced to £6.5 million for early settlement.

However, the accountancy watchdog has not yet published its findings.

Taveta’s lawyers had argued that it was not seeking a “blanket prohibition” but wants the FRC to redact parts of its report which “contain criticisms of the claimant, its directors and employees”.

The lawyers also said that if the injunction was not granted, a judicial review of the FRC’s report sought by Taveta would be “pointless” as the “damage would be done”.

Meanwhile, FRC’s lawyers said it should be allowed to publish its findings and that Taveta had no right to challenge the report.

The FRC has given an undertaking to Taveta that it would not publish the report before the judge’s ruling later today.

When BHS collapsed 13 months after Chappell acquired it, it left behind a £571 million pensions black whole which affected 22,000 employees and former employees, triggering a parliamentary inquiry spearheaded by Frank Field MP.

Field, who been in a long-running and very public feud with Green since the BHS collapse, had pressed the FRC to publish its findings on PwC’s discredited audit.

Field said the work and pensions select comitttee, of which he is the chair, has a copy of the FRC’s report but parliament was being “gagged” as a result of Taveta’s legal action.

On the other hand, Chappell is also considering legal action over PwC’s discredited audit of BHS, and is reportedly investigating whether he can take action against those involved.

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