Former owners accused of “lining their own pockets” in Bernard Matthews deal
The deal to save 2,000 jobs at Bernard Matthews that saw Boparan Private Office buy the group out of administration happened after “the former owners passed up a better deal for pension scheme members in favour of lining their own pockets”, a Parliamentary Select Committee has said.
The Work and Pensions Committee has published correspondence showing the former owners of Bernard Matthews, Rutland Partners, rejected a buyout offer that would have protected the pension scheme, in favour of an insolvency process that ensured a greater return for them.
It said members of the Bernard Matthews pension scheme now face cuts to their retirement income.
The use of this insolvency procedure as part of the transaction meant that the Bernard Matthews defined benefit company pension scheme – with a deficit estimated at up to £75m – was “jettisoned” into Pension Protection Fund (PPF) assessment.
Both the rejected bid and the successful bid came from Boparan Private Office (BPO), which is the investment vehicle of West Midlands entrepreneur Ranjit Boparan. He owns the 2 Sisters Food Group and a growing list of restaurants, including Harry Ramsden’s, Ed’s Easy Diners, and Giraffe.
Frank Field MP, chair of the Work and Pensions Committee, said: “I have confidence that the PPF [Pension Protection Fund], 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.”
In correspondence with the Committee, BPO’s chief finance officer Steve Henderson defended his company’s role in the process.
He said BPO “had no influence” with the administrator, Deloitte, who followed the legislation behind business failure which defines the order of priority of creditors. It ranked both the bank funders and Rutland Partners above the pension fund.
Henderson said BPO made an offer to buy the whole share capital of Bernard Matthews last July – before the company went into administration – which included all assets and liabilities including the defined benefit pension scheme and its liabilities, but this offer was rejected.
The company assumed the offer, which was the only offer received for the whole of the company, was not accepted because owners Rutland would not have received full repayment of their loan notes and interest.
A deal was finally agreed in September, after Bernard Matthews had entered administration.
Henderson said the acquisition “directly saved over c.2,000 jobs, secured British turkey supply to consumer for Christmas 2016 (which retailers were genuinely concerned may not be delivered by Bernard Matthews prior to the transaction) and ensures that there will be future investment in British turkey agriculture and processing.”
