City slickers who got £6m from the £1 BHS sell-off
TWO City firms were paid £2million to seal the controversial sale of BHS despite concerns over its new owner’s chequered business history.
The companies acting for playboy Dominic Chappell were on ‘no sale-no fee’ agreements during the successful bid to buy the chain from Sir Philip Green.
Leading law firm Olswang and accountancy giant Grant Thornton subsequently earned £4million in fees between them from Mr Chappell’s venture Retail Acquisitions in the following year, it is understood.
They now face being called before MPs to answer questions after the all-party business, innovation and skills select committee launched an inquiry into the sale.
The lavish payments will enrage the 11,000 BHS workers and 20,000 members of the company pension fund, who are facing an uncertain future.
The retailer collapsed into administration on Monday with a £571million pension deficit just a year after former racing driver Mr Chappell took over.
His firm, Retail Acquisitions, bought the troubled chain from Arcadia boss Sir Philip in March 2015 for £1.
It has since emerged that Mr Chappell had been involved in a number of failed businesses and was being investigated by authorities over his finances at the time of the sale – raising questions about what checks were carried out. Sir Philip could now be brought before MPs to answer questions as part of the probe. Business committee chairman Iain Wright said: ‘The sale and acquisition of BHS raises real questions about whether directors acted in the best long-term interests of the company and their employees.’
He questioned why, given its pension liabilities, BHS was allowed to be sold for £1 ‘to someone without any retail experience at a challenging time for the sector and with, what looks like, no proper checks’.
Olswang and Grant Thornton, hired by Mr Chappell and Retail Acquisitions to provide advice over the purchase, had a requirement to conduct a financial health check on the businessman, it is understood.
Jonathan Silverman, partner at Silverman Sherliker LLP, said vetting would have been carried out by Olswang but questioned why the firm then went on to represent him in the deal. ‘I would have expected them to be wary,’ he said.
Former shadow chancellor Chris Leslie said: ‘Serious questions are rightly being asked about the failure of professional advisers – including lawyers – in this sorry saga.’
The Serious Fraud Office said it could not confirm or deny if it was carrying out an investigation.
Sir Philip had asked investment bank Goldman Sachs and leading law firm Linklaters to act on his behalf over the sale. A bank spokesman insisted it ‘had no formal role’ and was not paid.
However, the tycoon and his wife could also be brought before MPs to answer questions after the Commons work and pensions committee launched a separate inquiry. Sir Philip, 64, and
‘Should have been wary’
Lady Green, 67, have been under fire after it emerged they had taken almost £400million out of BHS in the first four years of their ownership.
The couple, said to be worth £3.22billion, could be questioned about the estimated £571million black hole in the BHS pension scheme. Meanwhile, it is understood that BHS administrators have received ‘around 50’ expressions of interest for all or part of the retailer.
Duff & Phelps is seeking buyers for the retailer as a going concern, although industry experts have doubts over whether BHS can be saved in its current form.
A spokesman for Olswang said it could not comment on clients’ affairs. Grant Thornton said all potential clients go through a ‘rigorous’ vetting process.