BHS owner reportedly moved £1.5m days before collapse

The owner of collapsed High Street chain BHS took £1.5m out of the company just days before it went into administration, UK media reported on Wednesday.

David Chappell moved the cash into a company called BHS Sweden, controlled by a former member of his Retail Acquisitions company, Lennart Henningson, according to The Guardian newspaper, citing unnamed sources. It has no relationship with the UK company.

The BBC reported that BHS chief executive Darren Topp ordered the return of the cash when he discovered what Chappell had done. There is no suggestion of any impropriety taking place.

All of it was transferred back, less £50,000 Chappell maintained were foreign exchange costs.

BHS was placed into administration on Monday, putting 11,000 jobs at risk. Debts of £1.2bn include a pension fund deficit of £571m. Members of the scheme face a reduction in payouts when they retire.

Open warfare broke out between Chappell and Philip Green (pictured), who sold BHS to Retail Acquisitions for £1 last year.

Chappell said a £60m loan, a key part of any refinancing package, collapsed because Green would not allow an IOU of £40m to be moved down the debt priority order.

“It’s not right the way it’s gone. It was in Arcadia’s gift that this business was carried forth,” Chappell told the Financial Times.

Chappell claimed he had a plan to turn BHS around, but said it was hampered by the row between Green and the Pensions Regulator.

However, this was rejected by other management within BHS who said it would not have been enough to save the ailing firm.

The whole affair had placed Green under a bright spotlight over the way he managed BHS, particularly around how much he took from the business in dividends, given the size of the black hole in the pension fund.

Billionaire Green, about to take delivery of a £100m superyacht, is expected to be called before the cross-party parliamentary Work & Pensions committee as part of its investigation into the likely impact of the BHS collapse on the state-backed Pension Protection Fund (PPF).

The Guardian estimated that Green and his family had taken £586m out of BHS in dividends, rental payments and interest on loans. He has reportedly offered to pay £80m into the to help meet the shortfall, but is likely to be asked for significantly more.

When Green bought BHS in May 2000 the fund had a surplus of £5m, rising to £17m in 2001 on a pre-tax basis.