Chappell ‘broke’ after deal for BHS

A SERIES of broken promises and a refusal to sell the struggling BHS chain to a business rival by retail tycoon Sir Philip Green plunged its new owner into a tax evasion nightmare, a jury has been told.

Dominic Chappell, 53, whose consortium controversially bought BHS from Sir Philip for £1 in March 2015, denies three charges of cheating the public revenue related to his bankrupt finance company Swiss Rock Limited.

Chappell, of Blandford Forum, Dorset, is accused of dishonesty regarding VAT, corporation tax and income tax between January 2014 and September 2016.

Defence counsel Trevor Burke QC told a jury at London’s Southwark Crown Court that the case is not about “yachts,

Bentleys and the Bahamas”, but they should ask themselves if there was something which stopped Chappell paying the tax.

Sir Philip, who had run BHS for 15 years, effectively thwarted attempts to rescue BHS by failing to “sort” out a £250 million to

£500 million pension deficit as he promised, to secure finance for suppliers and with a blanket refusal to “entertain” the company being sold on to rival Mike Ashley, the court was told.

The company that was used by Chappell’s group to purchase

BHS was called Retail Acquisition Limited (RAL).

Mr Burke said: “Sir Philip

Green would not permit anyone access to the pension scheme materials, so the due diligence by Grant Thornton (the consortium advisers) and others in advising RAL was in its very nature limited due to the non-disclosure.”

Within two weeks of buying BHS, which was losing £1 million a week, the “pension problem exploded”, Mr Burke said.

Chappell later began talks to try to sell to Mr Ashley, who was described to the jury as being as “rich beyond the dreams of avarice”. Mr Ashley, whose sprawling business empire includes a role as Sports Direct chief executive, was “content” in trying to “rescue it (BHS) and had the money and muscle to do it”.

Mr Burke said Sir Philip would not “entertain the notion of selling to a competitor and refused to engage”.

Chappell’s defence suggests that, had BHS not failed, he would have had the funds to pay his tax liability. The prosecution alleges Chappell evaded paying tax on £2.2 million of income he received from the BHS deal and instead used it to buy a Bentley car and a yacht.

In his opening statement to the jury, Mr Burke said because of circumstances out his control, Chappell was “utterly broke”.

The hearing was adjourned to Monday at 10am.