Inside Hit where it hurts
EX-BHS owner Dominic Chappell fined £50,000
THE former owner of BHS, Dominic Chappell, has been ordered to pay a £50,000 fine and £37,000 court costs for failing to disclose vital details to the pensions watchdog as part of its investigation into the collapse of the high street chain.
Thrice bankrupt Chappell, 51, bought the chain from billionaire Sir Philip Green for just £1 in March 2015. The 88-year-old company crashed just 13 months later with the loss of around 11,000 jobs and 164 stores.
The Pensions Regulator, which has a responsibility to safeguard pensions, moved to protect the pensions of 19,000 members. Just days after it collapsed it ordered Chappell to hand over hundreds of documents in relation to the £571m pension black hole at BHS. When he failed to comply TPR charged Chappell with neglecting or refusing to respond to three Section 72 notices to provide information and documents between April and May 2016 and February 2017.
In the first ever prosecution of its kind, Chappell, of Blandford Forum, Dorset, was hauled before a court last month. He was found guilty of all three charges and faced a maximum sentence of an unlimited fine for failing to comply with the notices.
Yesterday, Chappell appeared at Barkingside magistrates’ court where he was fined £15,000 each for the first two charges (£30,000) and £20,000 for the last charge, with £37,430.84 court costs.
Earlier he told the court: “I have no funds as it stands.” He said there was a perception he had “made millions out of BHS” but he had actually been left almost penniless by the collapse.
Alex Stein, prosecuting, said in a letter handed to court Chappell claimed he had no assets whatsoever other than a share in a property. Under oath he told the court he had a monthly income of around £2,700 to £3,000 acting as a consultant to a small cosmetic company. But he claimed he had extensive outgoings of almost £9,000.
This is made up of £3,800 a month rent on his Dorset home, £2,666 leasing a 2017-plate Range Rover and £2,500 a month school fees for his two children, aged eight and 12, which he was in arrears on.
He told the court: “I’m an entrepreneur. It’s the nature of the business. There are boom times and slack times.
“I have no way of paying a large fine at the moment but I could speak to people to borrow a loan.”
He said he had endeavoured to fully comply with the TPR requests for information and documents and had spent around £250,000 in legal fees in the wake of BHS collapse.
The fine comes just weeks after Chappell, a former racing driver, was handed a formal demand for £10m from TPR as it attempts to plug the failed retailer’s pension fund. The TPR has already agreed a deal with Sir Philip Green that he should pay £363m towards the pension deficit.
District Judge Gary Lucie said: “He is not being sentenced in any way for the collapse of BHS or the pension funds, just the failure of him to comply with demands over the pension funds.” He said the court must send a message “to those in positions of power” that a failure to comply to TPR demands will lead to a substantial penalty.
He said: “There was a complete lack of remorse on Mr Chappell’s part. The fine should therefore reflect that,” adding: “There has not been full and frank disclosure of his means. I’m not impressed by the lack of detail.” Mr Lucie proposed he pay £2,500 per calendar month. If Chappell does not have the means to pay, it could lead to him being declared bankrupt for the fourth time.
Outside court Chappell said: “The sentence was harsh. However, we have launched an appeal. It would be inappropriate for me to say anything further until the appeal, which we can run on a much more sensible basis and show the TPR for what they really are.”