Former Bernard Matthews owners accused of ‘lining their own pockets’ at the expense of pensioners
- Credit: Archant
The former owners of Bernard Matthews have been accused of passing up a better deal for its pension scheme members in favour of 'lining their own pockets'.
Frank Field, the chairman of the respected cross-party Work and Pensions Committee, said the way the sale of the turkey giant was handled raised concerns about the use of pre-pack administrations to shred responsibility for pension liabilities.
A statement from his committee said an exchange of letters between the committee chairman, the administrator and the new owner confirmed that former owners of Bernard Matthews, Rutland Partners, had rejected a buyout offer that would have protected the pension scheme, in favour of an insolvency process that ensured a greater return for them.
Rutland Partners declined to comment on the Work and Pensions Committee release.
Bernard Matthews was sold in September 2016 by Rutland Partners to Boparan Private Office (BPO) via a 'pre-pack' administration process overseen by the multinational company Deloitte.
But the company's pensions deficit - estimated to be worth up to £75m – was jettisoned into pensions lifeboat, the Pension Protection Fund (PPF).
BPO confirmed in a letter to Mr Field that it had previously offered to buy Bernard Matthews outright and to assume ongoing responsibility for the full liabilities of the pension scheme, but it was rejected because it would have written off the majority of the outstanding loans Rutland Partners owned.
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Mr Field said: 'I have confidence that the PPF, working with the scheme trustees, will act in the best interests of the pensioners, but it's clear that the former owners passed up a better deal for pension scheme members in favour of lining their own pockets.'
Backers of pre-pack arrangements say it may enable a company to survive and rescue jobs. MPs have raised concerns about job security at Bernard Matthews following its takeover by BPO.
The PPF said it would always work in the best interests of pension scheme members and the UK companies that support the PPF levy. It said it was working with the insolvency practitioner, the Pensions Regulator and the trustees to maximise the recovery to the scheme.'
'The state of the business was even more parlous than expected'
It was confirmed last week that 114 jobs are to be lost at Bernard Matthews, with cuts from chicken production and management divisions.
The final total was lower than the 155 feared when the plans were announced two months ago, with some redundancies being avoided through staff being redeployed to other parts of the business.
After concerns about the job losses from MPs, BPO said in a letter that it was 'factually accurate' for media to have reported that jobs had been saved.
It said: 'However, no business can ever give cast-iron guarantees that all jobs will be maintained in perpetuity. This is neither realistic nor honest.
'Once BPO took ownership, the state of the business was even more parlous than expected and in the shorter, this means taking difficult decisions to make the business viable for the long term including redundancies.'
A conflict of interest?
Deloitte said 'ethical walls' were put up to ensure there was no conflict of interest after MP Frank Field questioned existing links between the organisation in charge of the administration of Bernard Matthews and entrepreneur Ranjit Boparan, who bought the company.
Boparan Holdings Ltd is not the same company or subsidiary as Amber REI Holdings Ltd, which bought Bernard Matthews, but Deloitte said it recognised that it also provided audit services to Boparan Holdings which is controlled by the same individuals.
It said it had put in 'appropriate safeguards (including ethical walls) to ensure no conflict of interest or breach of confidentiality arose'.
It said that the prior relationships had been disclosed on the Statement of Proposed Administrator and to 'the clients in the Deloitte Services prior to the administration'