Five questions BHS playboy must answer

BANKRUPT businessman Dominic Chappell, who bought BHS for £1, will make his first public appearance since the store collapsed in to administration tomorrow.

The one-time racing car driver will be quizzed by MPs over his involvement in the scandal which has seen 11,000 staff lose their jobs, and the pensions of thousands of others facing cuts.

This hearing should at last give some answers to the questions about how a man with no management experience could take over the 88-year-old chain.

And it will be a chance to hear from other City experts who could shed light on the collapse.

Despite weeks of investigations already, there are key questions MPs will want to clear up:

What is Chappell’s connection with Sir Philip Green?

The question on the lips of every BHS employee and pensioner is: how did a man with no retail experience and a chequered past come to run one of Britain’s most famous department stores, and why did Green sell it to him?

Chappell has three former bankruptcies, a series of county court rulings for debts and a string of failed ventures to his name. It is thought he was introduced to Green by Paul Sutton, a convicted fraudster. Green claims he has cut all ties to Sutton.

How much did Chappell reveal of his business disasters?

In 1993 he was a director of a property firm called Eyot, which collapsed into administration in 2008 owing £230,000. Three years later he declared himself insolvent at Slough County Court. He became bankrupt in December 2005 following a dispute with a London estate agent over an unpaid fee. He was discharged in December 2006. A deal he was involved in to develop a marina in the Isle of Wight turned sour in March 2009 when loans totalling £24m were called in and administrators were appointed.

Chappell soon became bankrupt for a second time. He was discharged from this in 2010.

Where did Chappell’s money come from?

Chappell’s firm Retail Acquisitions is said to have pumped £15m into BHS but it is unclear where this came from. He seems to have few assets of his own – the £1.5m Grade II Dorset manor house where he lives is rented.

There are reports £5m was a loan secured against the assets of BHS, but MPs will want to quiz Chappell on the origins of the investment. And then there is the question of a £35m loan allegedly given to Chappell by father-and-son property moguls Guy and Alexander Dellal. Later on the Dellals bought a BHS store and sold it for a profit.

MPs will ask why someone such as Chappell was able to come across such substantial finance and whether the property deal for the Dellals was in any way linked to the loan payment.

How much did he take out?

Chappell diverted £1.5m to a firm called BHS Sweden, which has no connection with BHS, days before the administration. He was pressured by colleagues to repay the sum, which he did but with a £50,000 shortfall ‘to cover the cost of currency conversions’.

He also faces questions over a £1.5m loan that eventually paid off the mortgage on his father’s house in Sunbury-on-Thames.

Will Retail Acquisitions pay back BHS money it owes?

Chappell’s firm took an £8.4m loan out of BHS and around £6m of this still needs to be repaid. So will Chappell take steps to give this back?