BHS saga continues: Chappell comes under spotlight as MPs scrutinise funds he used

BHS To Go Into Administration
Former BHS boss Darren Topp accuses Dominic Chappell of treating BHS' money as his own (Source: Getty)

Ever since BHS collapsed into administration, recriminations have flown about who is to blame for the parlous state of its finances, particularly with regard to the £571m pension deficit.

Today, the spotlight fell again on Dominic Chappell, the former racing car driver and bankrupt whose outfit Retail Acquisitions bought BHS for £1 off from its former owner Sir Philip Green.

Iain Wright MP, chair of the Business, Innovation and Skills committee, and Frank Field MP, chair of the Work and Pensions committee, have written to Chappell demanding a breakdown of the funds he personally took out of BHS.

Field said: "While the main focus of this inquiry has been the stewardship of BHS and its pension fund in the run up to the sale to RAL, the exact circumstances of that sale, the directors of RAL - who were paid very handsomely for their role in the sale - cannot escape scrutiny for the plight of BHS and its pension fund.

"We are still elucidating the full story of the final collapse of BHS, but it happened under Dominic Chappell and RAL's stewardship: they should also account fully and properly for their decisions and actions."

Read more: Chappell took early "hardship" salary, says former BHS boss

The call for answers follows new written evidence provided by former BHS chief exec Darren Topp. In written submissions released today, Topp accused Chappell of treating BHS' money as his own, and taking his salary early as a "hardship payment".

In a letter dated 21 June 2016, Topp lists occasions when Chappell tried to take the company's money, alleging that the latter tried to buy family holiday flights from the company budget.

Chappell is accused of taking a "hardship payment" before his family Christmas vacation to the Bahamas, "despite RAL having taken out millions of pounds since the acquisition", Topp wrote.

It is alleged that he demanded a loan of £90,000 from the BHS treasury to pay his personal tax bill at the beginning of this year, a move which prompted BHS to hire its own lawyers to defend itself.

Read more: Sir Philip Green is looking to save 1,000 staff in BHS concessions

"This was at a time when cash resources were limited and needed to pay both suppliers and employees' payroll," Topp told MPs investigating the collapse of BHS. "Following legal advice BHS insisted on the return of that money which was duly returned within 10 days."

Topp said "the business was ripe for a turnaround", but it failed because "sadly, RAL took money out of the business, not put money in".

"BHS failed because of RAL's failure to invest or attract investment and provide a credible basis for the continued support of the supply base and associated extension of trade credit, whilst taking £17m out of the business," Topp said.

"Matters were made worse by the lack of a speedy solution to the pension deficit."

Read more: MPs want Dominic Chappell to tell them about his bonus - and why he got one

In a statement, Chappell said: “At no stage have I ever used the company bank account as a private account for myself and all and every payment except two went through the normal BHS process and system. I left the business for Christmas in or around 15 December. It was suggested by the BHS management that I took an early payment as salary payments were not due until a few days later.

On the matter of the holiday, he said: “There was no intent whatsoever to have the company pay for my private travel, it was purely an issue of logistics.”

The MPs will also be focussing on other Retail Acquisitions' staff, who Topp described as “so called experts” that “were paid considerable sums of money”. The nine staff Topp listed earned a joint £2.6m between March 2015 and February 2016.

Read more: Sir Philip Green admits he made "a bad call" selling BHS to Chappell

Retail Acquisitions' directors Stephen Bourne and Mark Tasker, who resigned the day BHS was sold, earned £400,000 each, as revealed by separate documents from Retail Acquisitions' advisers Olswang to The Pensions Regulator.

Eddie Parladorio took home £460,000.

Topp described it as "particularly troubling" that RAL has filed no accounts with Companies House, saying: "Only by scrutinising these financial accounts can anyone hope to understand who profited from the demise of BHS and whether any third parties played a role."

The saga continues.

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