Former BHS owner ordered to pay £9.5m to pension schemes
The disgraced entrepreneur Dominic Chappell has been ordered to pay £9.5m into BHS pension schemes after his appeal failed.
Chappell, a former bankrupt with no retail experience, bought the chain from billionaire Sir Philip Green for £1 in 2015. But it crashed 13 months later, leaving a pensions hole of up to £571m.
The Pensions Regulator (TPR) immediately moved to protect the pensions of 19,000 members and made three requests for information under a section 72 order. It managed to secure a £363m cash settlement with Green to rescue the scheme.
However, Chappell was accused of failing to hand over vital documents to the regulator as it sought to stabilise the pension fund.
TPR took him to court and he was charged with three counts of neglecting or refusing to provide documents without a reasonable excuse, contrary to the Pensions Act 2004.
During the hearing, the former racing car driver from Blandford Forum in Dorset claimed he was being made a “scapegoat” for the failure of the high street chain and said he wished he had never bought it.
Representing himself at Hove crown court, Chappell said that unlike billionaire Green he did not have the money to make the problem go away. “I’m not Philip Green, sitting on a £100m yacht in the south of France, who just wrote a cheque for £350m to make the problem go away.”
Chappell said during his 13 months at the helm of BHS he had contributed £4.5m to the pension fund. However, he was convicted of failing to hand over documents to the regulator and ordered to pay a £50,000 fine and £37,000 court costs.
In January 2018, Chappell was handed a bill of almost £10m to make up the BHS pensions shortfall. But he decided to fight the ruling and appealed against the decision to the upper tribunal.
Now TPR has secured a further £9.5m towards the BHS pension fund from Chappell after his appeal was rejected.
Nicola Parish, TPR’s executive director of frontline regulation, said: “We are pleased that the decision to issue two contribution notices to pay money into the BHS pension schemes stands.
“This case illustrates how the Pensions Regulator is willing to pursue a case through the courts to seek redress for pension savers. It illustrates the situations our anti-avoidance powers were designed to meet and which allow us to protect the retirement incomes that savers deserve.”
However, TPR is unlikely to receive the £9.5m. After his initial appeal at the crown court was rejected, Chappell claimed he was facing bankruptcy and would not be able to pay the fine or the pension shortfall.
“I’ve been worn out. I cannot play this game any more. I can’t afford to do so,” he said.
In October Chappell appeared in court accused of a £500,000 tax fraud. He denied denied three charges of tax evasion, alleging he failed to register Swiss Rock, his bankrupt finance company, for taxes from the correct date, gave false information to tax authorities, did not declare profits and failed to submit VAT returns.
The alleged offences took place between January 2014 and September 2016.
The case was adjourned and Chappell is scheduled to go on trial in October.