Dominic Chappell, the former owner of BHS, has been ordered to pay £9.5m into the pension schemes of the department store retailer, which collapsed under his management in 2016.
The Pensions Regulator disclosed details of the order on Tuesday and revealed that Mr Chappell, 52, had fought for more than three years to have the action quashed.
“We are pleased that the decision to issue two contribution notices to pay money into the BHS pension schemes stands,” said Nicola Parish, executive director of Frontline Regulation with The Pensions Regulator.
“This case illustrates how TPR is willing to pursue a case through the courts to seek redress for pension savers. It illustrates the situations our anti-avoidance powers were designed to meet and which allow us to protect the retirement incomes that savers deserve.”
Retail Acquisitions Limited, of which Mr Chappell was a majority shareholder and chairman, bought BHS from retail tycoon Philip Green for £1 in 2015.
Just over a year later, the department store collapsed into administration with a £531m funding hole in its two pension schemes, leaving more than 20,000 members facing cuts to their income.
In its notice against Mr Chappell, the regulator’s determinations panel described a series of actions that left the pension schemes in a weaker position. They included the sale of the business to RAL and the adoption by the BHS board of a “speculative, sensitive and risky” turnround plan without adequate due diligence.
Following the sale, fees and other monies extracted from BHS had “served to reduce” the sums available to the pension schemes “to a material extent”, said the committee. “A net total of £4,310,900 was paid to the Respondent or (so it appears) for his benefit,” it added.
The notice added that the department store’s fortunes were “damaged” by the appointment of inexperienced personnel to the boards of BHS and its parent company BGL.
The order against Mr Chappell came after a lengthy legal process that was initiated by the regulator in 2016. In a separate case regarding the BHS pension schemes, the regulator in February 2017 agreed a £363m cash settlement with Sir Philip.
The Pension Protection Fund, the lifeboat of last resort for members of failed company retirement schemes, is now responsible for recovering the money that Mr Chappell has been ordered to pay.
“We intend to pursue Dominic Chappell for the £9.5m as detailed in the Pension Regulator’s determination notice. If he is unable to repay this debt we will vigorously continue to follow the steps available to any creditors in a debt recovery process,” said a PPF spokesperson.
The action against the former bankrupt comes three months after he was barred for 10 years from acting as a director. The ban, secured by the Insolvency Service in an order from the business and property courts, related to his conduct at eight different companies.
Mr Chappell did not respond to a request for comment.
Recent Comments