Former BHS owner a 'Premier League liar', MPs told

Former BHS owner Dominic Chappell “had his fingers in the till” and was a “Premier League Liar and a Sunday Pub League retailer at best”, executives of the collapsed High Street chain told a parliamentary inquiry on Wednesday.

In an extraodinary evidence session, MPs heard a series of revelations from BHS chief executive Darren Topp and former financial adviser Michael Hitchcock, including claims that Chappell (pictured), a three-time bankrupt, had tried to take the the BHS international and online operations out of the business.

Topp also said Chappell had threatened to kill him after the chief executive accused him of the "theft" of £1.5m in BHS funds.

The joint Work & Pensions and Business select committee inquiry also heard from former board members of Retail Acquisitions Ltd (RAL), the BHS takeover vehicle, and Chappell himself, with details emerging of the events surrounding the purchase of the company from retail tycoon Philip Green in 2015 and its descent into administration in April 2016 with the loss of up to 11,000 jobs and closure on 163 stores.

Over five hours of evidence a picture emerged of rows over the £571m pension deficit between Green and the government regulators, agreed property deals that were scuppered at the last minute and a rescue offer from the controversial Sports Direct owner Mike Ashley that apparently drove Green "insane" with rage.

Topp confirmed that Chappell had tried to transfer £1.5m in cash to a company called BHS Sweden and had intervened to stop it, adding that Chappell had threatened to kill him if he “kicked off”.

“My initial reaction, if I'm honest, was to call the police. I rang Dominic straight away, and said 'that's theft',” Topp said in relation to the discovery that the money had been moved.

"He (Chappell) said: 'Don't kick off about this Darren, I've had enough of you telling me what to do over the last few months. If you kick off again I'm going to come down there and kill you'.” Topp added that Chappell claimed to be a former member of the elite SAS military unit.

Chappell later denied making the threat when questioned by reporters outside parliament after the hearing.

He told the hearing said the money had been placed in BHS Sweden "in trust" on behalf of BHS , although he admitted it had no connection to the British operation. BHS Sweden was controlled by Lennart Henningson, a former member of RAL.

Green went 'absolutely crazy'

He also laid the blame for the firm's collapse at Green's door, saying the billionaire's obsession with the pension regulator over the deficit had prevented any hope of turning around the company's fortunes and he then tipped the company over the edge by calling in a £35m loan upon discovering the attempt to sell BHS to Sports Direct's Ashley.

“Philip went absolutely crazy, screaming and shouting down the phone that he didn’t want to get involved with Mike Ashley," Chappell said.

Chappell admitted that £15m put into BHS after the deal had not come from his own company, but was made up of £10m from former owner Green and £5m from ACE, the property development group owned by the Dellal family.

The ex-racing car driver also confessed that he had made money on the BHS deal, but declined to give a figure despite being asked on several occasions.

He also admitted that he only discovered the size of the £571m pension fund deficit after he had bought the company from Green for £1 in 2015 as Green would not allow him to talk to the regulator as a condition of any deal. Chappell told MPs that he was considering suing Green.

Later on, when questioned about his lack of retail experience he said: "I was very open, we knew nothing about retailing."

The MPs heard from financial advisor Hitchcock that the BHS offices, called North West House, were sold for £32m and £7m went to RAL.

“You don’t take a £7 million loan from a company you have just bought that needs cash to turn around. That doesn’t make sense,” Hitchcock said.

Conservative committee member Richard Graham asked Hitchcock how much cash RAL had taken from BHS. "A figure of £25m has been mooted," he put to the witness.

"RAL took £17m out of the business. Fact. Arguably he (Chappell) put £10m of that £17m back in. Fact," Hitchcock said in response.

One of the key insights into the nature of the deal revolved around an arrangement to sell Marylebone House, a building owned by Green, to RAL for £35m, which would then sell it on to the Dellals for £45m and £8.5m of the difference to fund the deal.

However, Green pulled out of the deal at the last minute, according to Chappell. He then agreed to pay £10m as compensation.

MPs were also told that Chappell was in the Bahamas on the day the company went into administration.

Chappell said he was meeting a commercial bank and investors to try to get to buy back around some of BHS’s 163 stores.

Chappell told the committee Green could have worked with him to save the business. He also said Green had a close relationship with administrators Duff & Phelps, calling the firm his "pony".

He also said billionaire Green had been successful at making his money by "raising a lot of money from businesses" and taking large dividends out of them".

Chappell told the committee that Green could not turn around BHS and renegotiate expensive rents on its property portfolio. He quoted Green as saying: "no one's going to do a deal while I'm sat on the back of a yacht".

Green will appear before the committee on June 15.