Yahoo Finance Former BHS owner Dominic Chappell ordered to pay £9.5m into pension schemes
The businessman who bought BHS from Sir Philip Green for £1 before it collapsed has been ordered to pay £9.5 million into the failed high street chain’s pension schemes after an unsuccessful appeal.
The Pensions Regulator (TPR) said Dominic Chappell’s appeal against two contribution notices – which were first made in January 2018 – to pay a total of £9,542,985 into the BHS’s pension schemes was struck out in its Upper Tribunal.
The watchdog said the decision means the BHS pensions scandal is “coming to a close” nearly four years after the retailer hit the wall, causing the loss of 11,000 jobs and leaving a mammoth pension deficit of more than £570 million.
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 in £363 million in cash to the BHS pensions schemes to help save them from entering the Pensions Protection Fund, the Government’s pensions lifeboat.
Nicola Parish, 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.
“It illustrates the situations our anti-avoidance powers were designed to meet and which allow us to protect the retirement incomes that savers deserve.”
It marks the latest 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.
Mr Chappell – a former bankrupt – was the architect of Retail Acquisitions’ purchase of BHS four years ago.
When it first made the payments order against Mr Chappell, 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 £580 million 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 £1.5 million 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 £1 million to Retail Acquisitions Ltd, a company in which he was also a director and 90% 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.”
