Dominic Chappell: Former BHS owner ordered to pay £9.5m into pension schemes
Watchdog says decision means the BHS pensions scandal ‘coming to a close’, nearly four years after retailer hit the wall
Mr Chappell lost an appeal against an earlier ruling that he must hand over the money because of failings while he owned BHS that were detrimental to the pension schemes and thousands of savers.
The businessman, a serial bankrupt, had challenged a demand from the Pensions Regulator (TPR).
Losing the case is another headache for Mr Chappell, who was banned from running a company for 10 years by the Insolvency Service last November and faces a trial this year over allegations of £500,000 of tax fraud, which he denies.
BHS failed in 2016, putting 11,000 employees out of work and leaving a £570m pension deficit shortly after Mr Chappell, bought it from Sir Philip Green.
The watchdog said the decision means the BHS pensions scandal is “coming to a close” nearly four years after the retailer hit the wall. The regulator will now look to recover the money from Mr Chappell for the two schemes.
It comes after Sir Philip agreed two years ago to pump £363m of cash into the BHS pensions schemes to help save them from entering the Pensions Protection Fund, the government’s pensions lifeboat.
Nicola Parish, the TPR’s executive director of frontline regulation, said: “We are pleased that the decision to issue two contribution notices to pay money into the BHS pension schemes stands.
“This case illustrates how TPR is willing to pursue a case through the courts to seek redress for pension savers.”
Mr Chappell was the architect of Retail Acquisitions’ purchase of BHS four years ago.
When it first made the payments order against Mr Chappell, the TPR concluded a series of acts were “materially detrimental” to the pension schemes, including the acquisition of BHS, the appointment of inexperienced board members, an inadequate business plan and the way money was extracted and distributed to Mr Chappell, advisers, company directors and family members.
It also pursued legal action against Sir Philip in 2016 in an attempt to force him to contribute to the BHS pensions schemes, but this was halted after the Topshop owner’s settlement.
Sir Philip owned BHS for 15 years before selling it to Mr Chappell, during which time the Green family and other shareholders are said to have collected £580m from the chain in dividend payouts, rental payments and interest on loans.
During his Insolvency Service hearing, it was alleged that Mr Chappell wrongfully diverted £1.5m of funds from BHS Ltd to a company based in Sweden, the day after the appointment of an administrator had been discussed by the board of directors.
He was also said to have transferred BHS funds in excess of £1m to Retail Acquisitions Ltd, a company in which he was also a director and 90 per cent shareholder at the time.
On Mr Chappell’s failed pensions payment appeal, AJ Bell senior analyst Tom Selby said: “This sorry saga is one step closer to being resolved.
“Despite this, thousands of former BHS workers will still understandably feel aggrieved that they will receive lower pensions than they had previously been promised.”