Former BHS boss accused of being a liar who had his hands in the till
The former owner of BHS, Dominic Chappell, has been accused of being “a liar” who had his “fingers in the till” by top BHS managers. The claims were made to MPs at a hearing into the collapse of the firm.
In a scathing attack, the ex-chief executive of BHS, Darren Topp, alleged Mr Chappell threatened to kill him during a row over company money.
Mr Chappell described that claim as “absolute rubbish” in a comment to a reporter after he had given evidence.
Mr Chappell, whose Retail Acquisitions bought BHS for £1 last year, defended his recovery plan for BHS, saying it had been “credible and viable”.
He told MPs that as the 163-store chain teetered on the edge of collapse, Sir Philip Green, whose Arcadia group sold BHS to Mr Chappell last year, scuppered a rescue deal with Mike Ashley, the owner of Sports Direct.
‘Premier League liar’
Earlier, Mr Topp said he initially took Mr Chappell’s claim to be a turnaround specialist and property expert at face value. When Mr Chappell’s promises “unravelled”, rather than “putting money in” he had “his fingers in the till,” Mr Topp said.
Former BHS financial consultant Michael Hitchcock was similarly scathing of Mr Chappell and his team. He told MPs: “I think I was duped. I think the technical term is a mythomaniac. The lay person’s term is he was a premier league liar and a Sunday pub league retailer. At best.”
He added: “The credibility and ability of the people Dominic surrounded himself with were not fit for purpose… I fundamentally don’t think he understood what was going on.
“I question his intelligence, he wasn’t a retailer. The motive was purely for his own benefit. There is a big smell test which I adopt in a lot of these situations, and it just did not smell right,” Mr Hitchcock said.
Mr Chappell, a former racing driver with limited retail experience, had promised to put millions of pounds into a BHS after he bought it from Sir Philip Green’s Arcadia group.
He said his business plan for BHS was fundamentally sound and the retailer could have survived if he been able to raise sufficient funds.
However, there are questions over his decision to transfer about £1.5m out of the company to Sweden. Mr Topp said his initial reaction to hearing of the transfer was to call the police.
During a heated phone call, Mr Topp told MPs, Mr Chappell threatened to kill him. “If you kick off about it, I’ll come down there and kill you,” Mr Chappell is alleged to have said.
However a Daily Telegraph reporter tweeted that, after the hearing, Mr Chappell described that claim as “absolute rubbish”.
The money was transferred back to BHS, minus transaction fees.
Meanwhile, Mr Hitchcock said he was forced to change the company’s bank mandate to “stop any chance of money flowing outside of the business”.
‘Philip went crazy’
During his questioning, Mr Chappell said Sir Philip could have done more to help save BHS, rather than tip it into administration.
Arcadia was a major secured creditor, and it was Sir Philip who took the decision to call in administrators Duff & Phelps, Mr Chappell said.
Mr Chappell claimed that just before BHS went into administration he had arranged a rescue deal backed by the billionaire owner of Sports Direct, Mike Ashley.
On learning of this deal, “Philip went absolutely crazy, screaming and shouting down the phone that he didn’t want to get involved with Mike Ashley,” Mr Chappell said, adding that it was then that Sir Philip called in a £35m loan.
Image copyrightPAImage captionSir Philip Green was accused of blocking a deal to sell BHS to Sports Direct
Mr Chappell also accused administrator Duff & Phelps of being “heavily conflicted” because of its close connection with Sir Philip, describing the firm as the billionaire’s “pony”.
Mr Chappell also said he was looking at launching a legal suit against Arcadia and Sir Philip over a BHS property sale by the tycoon to his stepson. He claimed that BHS missed out on £3.5m because of it.
The BHS pension scheme, fully funded a decade ago, now has a £571m pension deficit and negotiations over plugging these liabilities formed a key part talks to rescue the retailer.
Mr Chappell claimed BHS was “held to ransom” by the Pensions Regulator and Sir Philip. He said he attempted to meet the Pensions Minister three times, only for her to cancel on the grounds of being conflicted.
Also during his evidence, Mr Chappell:
- Declined to detail his earnings from BHS, but said he would send MPs a letter
- Called former BHS executive Michael Hitchcock “a man of many words and of very little delivery”.
- Apologised for the “avoidable travesty” of 11,000 people losing their jobs
- Said there had been an enormous lack of investment in BHS under Sir Philip
MPs have already taken evidence from the pensions regulator and financial advisers on the sale of BHS to Retail Acquisitions. Sir Philip is due to appear later this month.
The Business, Innovation and Skills Committee and the Work and Pensions Committee are hearing evidence into the collapse of the 163-store group, which resulted in up to 11,000 jobs losses and left a huge hole in the pension fund.
Duff & Phelps announced last month that BHS will be wound down with the loss of up to 11,000 jobs after efforts to find a buyer failed.
BHS, which went into administration in April after the company ran out of money and could not pay suppliers, is holding closing down sales over the coming weeks.