WHY DID GREEN SELL BHS TO A LOSER?
£1 buyer was being chased for millions – but tycoon STILL did the deal with former bankrupt
SIR Philip Green faced damning questions last night after it emerged the playboy who bought BHS was being chased for millions in debts from previous failed businesses.
Billionaire Sir Philip sold the high street chain for £1 to Retail Acquisitions, led by twice bankrupt former racing driver Dominic Chappell.
Last night it emerged that even as Mr Chappell was negotiating the BHS deal with Sir Philip, his finances were still being investigated by the authorities.
The 49-year-old had been made bankrupt after a deal to develop a marina on the Isle of Wight left him owing £24million. A public hearing over these debts was held just days before BHS was sold. The revelation heaps pressure on Sir Philip over why he pushed ahead with the sale and raises questions over how much he knew about Mr Chappell’s chequered financial past.
The chain’s collapse leaves 11,000 jobs at risk and a £571million deficit in the company pension fund. As the scandal grew, it also emerged:
Mr Chappell loaned £1.5million from Retail Acquisitions to a firm linked to his father;
He has a string of debts settled by the courts;
He had also been investigated by the Department of Business over a previous failed firm;
And he is trying to raise finance for US backers to buy back BHS stores.
BHS, which has 164 stores, officially went into administration on Monday. Its pension scheme has a black hole estimated at £571million. Thousands of savers could see their retirement income slashed by 10 per cent.
Retail Acquisitions is understood to have taken more than £25million in salaries, fees and interest charges from BHS over the past 13 months. Mr Chappell has a string of failed business ventures behind him and had racked up debts of £24million. 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 first became bankrupt in December 2005 following a dispute with a London estate agent over an unpaid fee. He was discharged from this in December 2006.
But before this happened he became secretary of a firm called Island Harbour Holdings developing a marina on the Isle of Wight. This deal turned sour and in March 2009 loans totalling £24million were called in and administrators were appointed.
Seven months later Mr Chappell became bankrupt for a second time after developers chased him person- ally for debts. He was discharged from this in 2010. As the fall-out rumbled on, he tried to restore his reputation. In 2014 he became a director of Retail Acquisitions. On March 11 last year the firm bought BHS for £1.
But just three days earlier the accountancy firm untangling the details of Mr Chappell’s bankruptcy called a public meeting to investigate if there were any new creditors.
And four days after the deal with BHS was signed administrators published a report into Island Harbour that said millions in debts left from the failed deal had to be written off. On April 9, a public meeting was held to clear up his bankruptcy debts.
While he had not done anything illegal, the purchase by an individual who had still not resolved his financial woes will raise eyebrows.
MPs continued to raise questions over Sir Philip’s role. Tory Richard Fuller, a member of the Commons business select committee, said: ‘He sold the company to people who did not have the credibility to run a lemonade store, let alone a large company responsible for the livelihoods of 11,000 people. Why on earth did one of the world’s great retailers trust this company?’
Mr Chappell further raised eyebrows last night by claiming he was trying to mount a rescue of the chain from administrators.
Meanwhile, a split has emerged between Mr Chappell and his chief executive at BHS, Darren Topp.
In an interview with the Daily Telegraph, Mr Chappell appeared to point the finger of blame for the chain’s collapse at Mr Topp, whom he called a ‘jumped up store manager’ who had ‘failed on every point of the business plan he presented’.