Ex-BHS owner owes pension scheme £9.5m
15 Jan 2020
Following a lengthy legal battle with the regulator, entrepreneur Dominic Chappell has been ordered to pay £9.5m into two pensions schemes connected to the collapsed high street chain BHS, which he bought for £1 in 2015
15 Jan 2020
When BHS went into administration a year later, the company’s scheme had around 19,000 members and a deficit of around £571m.
In February 2017 the Pensions Regulator (TPR) agreed a £363m cash settlement with previous owner Sir Philip Green, boss of Arcadia, and also began a series of actions against Chappell, a former bankrupt and ex-racing driver with no retail experience.
A warning notice was issued against Chappell in November 2016, which he went on to dispute in legal challenges with the TPR’s determinations panel and then at an Upper Tribunal.
The tribunal has now struck out his claim, finding that Chappell had failed to supply documents requested and had not followed due process, so the panel’s decision stands and he faces a demand for £9,542,985, as well as £50,000 fine and £37,000 court costs.
TPR found Chappell had engaged in a series of acts which were materially detrimental to the pension schemes.
These included the acquisition of BHS, management decisions at the company, the appointment of inexperienced board members, the implementation of an inadequate business plan and the way money was extracted and distributed to Chappell, advisers, company directors and family members.
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 is unclear whether Chappell will be able to make the £9.5m payment.
In November last year he was banned from being a company director for 10 years following an Insolvency Service investigation into his conduct while running BHS.
He also faces a court case later this year on charges of failing to pay corporation tax and personal income tax from dividends he received from Swiss Rock, the finance company used as the vehicle for purchasing BHS.