Pensions Regulator seeks ‘multiples of £1m’ from Chappell over BHS

dominic chappell

The Pensions Regulator is seeking millions of pounds from Dominic Chappell and Retail Acquisitions in relation to the £571m deficit in the BHS pension scheme, reports the Guardian.

Sources close to the situation say warning notices sent by the regulator to Chappell and his company show it wants to receive “multiples of £1m”.

The regulator has started legal proceedings against the former BHS owners Chappell and Sir Philip Green in an attempt to fill the pension deficit.

The exact details of the regulator’s claims are unclear. Any party that reveals the details of the warning notice sent to them risks breaking the law.

The claims against Chappell and Retail Acquisitions are likely to relate to the amount of money they took out of BHS and the sale of assets during their 13 months as owners of the department store chain.

The parliamentary committee that investigated the demise of BHS accused Chappell of having “his fingers in the till” and helping oversee the “systematic plunder” of the retailer.

Retail Acquisitions, which is 90 per cent owned by Chappell, collected an estimated £17m from BHS after buying it for £1 from Green in March 2015. The company sold off BHS’s flagship store on Oxford Street and its warehouse in Atherstone, Warwickshire, with some of the proceeds used to pay off a loan Retail Acquisitions had taken out.

The regulator is seeking about £300m from Green, but its legal claim against Chappell is significant and raises further questions about how well BHS was managed under his ownership. While Green is a billionaire tycoon, Chappell is a serial bankrupt.

BHS collapsed into administration in April, leading to the loss of 11,000 jobs. Green controlled the retailer between 2000 and 2015, during which time his family and other shareholders collected more than £580m.

The regulator announced last week that it had sent warning notices to Green, Chappell and their respective companies, Taveta and Retail Acquisitions. The regulator has not disclosed any of the details in the warning notices, but they run to more than 300 pages and explain why it believes the parties are liable to financially support the BHS pension scheme.

The notices are understood to set a range for the financial contribution sought from Green and Chappell, rather than a single figure.

The pair have about six months to reply to the regulator and set out their case. When they do, a determinations panel at the regulator, which is independent of the investigations team, will decide whether they have to make a contribution and how much it should be.

The regulator launched an anti-avoidance investigation into BHS in March 2015 after it was sold. The regulator has trawled through nearly 100,000 documents and held talks with the parties involved.

Lesley Titcomb, the chief executive of the Pension Regulator, has said she is still open to agreeing a settlement over the scheme’s funding. Last week, she said the warning notices had been issued after a “complex investigation” and the regulator was yet to receive a “sufficiently credible and comprehensive offer” to bail out the BHS pension scheme, which has more than 20,000 members.

The scheme is currently in an assessment period with the Pension Protection Fund. If a deal or settlement with Green cannot be reached, the scheme will eventually enter the PPF, where the members’ benefits will be cut by at least 10 per cent.

In June, Green told MPs he would sort the problems facing the scheme. However, no deal has been forthcoming and the tycoon was photographed on his new yacht during the summer.

Last month, the House of Commons voted unanimously to strip Green of his knighthood, which was awarded a decade ago for services to retail. During a fiery debate in parliament, Green was lambasted and described as a “billionaire spiv”.

The vote is advisory, as the power to rescind a knighthood rests with the honours forfeiture committee, a group of civil servants and dignitaries.

Pensions experts have warned that a legal battle about the BHS scheme could take years. Although the regulator can legally force Green and Chappell to make a payment, they can take an appeal against such a decision to the supreme court.

The regulator and Chappell declined to comment.