Owner of BHS threatened to kill me, chain's ceo tells MPs
The man who bought BHS for £1 from Sir Philip Green threatened to kill the high street chain's chief executive, a parliamentary hearing was told yesterday in London as he was branded a "premier league liar" who had his "fingers in the till".
Dominic Chappell was a "mythomaniac" and a "Sunday pub league retailer", according to former BHS finance consultant Michael Hitchcock.
He added: "I question his intelligence, he wasn't a retailer. The motive was purely for his own benefit. There is a big smell test which I adopt in a lot of these situations, and it just did not smell right."
BHS chief executive Darren Topp alleged Mr Chappell threatened to kill him when he questioned him over a £1.5m transfer of BHS money to Sweden.
"If you kick off about it, I'll come down there and kill you," Mr Topp said Mr Chappell told him. Mr Chappell refuted the claim, saying it was nonsense.
The explosive claims were made during heated exchanges in front of the Commons Business and Pensions Committees, which are investigating events surrounding the BHS collapse.
Mr Topp said Mr Chappell's assurances on buying BHS "unravelled and, rather than putting money in, he had his fingers in the till".
He claimed Mr Chappell received a £1.8m payment from the sale of BHS and £7m from the sale of the retailer's offices.
Mr Hitchcock said he was forced to change the company's bank mandate to "stop any chance of money flowing outside of the business".
Despite widespread criticism of Sir Philip for selling the firm to Mr Chappell, the committee was told the Topshop billionaire assured BHS management that the appropriate due diligence had been carried out.
Last week administrators to the chain called time on trying to find a buyer, resulting in the loss of up to 11,000 jobs and leaving behind a £571m pensions black hole.
Mr Topp said Sir Philip made it clear when he sold BHS that the responsibility for the pension deficit fell to a combination of himself, Arcadia and BHS.
Mr Hitchcock added that the BHS pension fund did not need to go into the Pension Protection Fund (PPF) as there were solutions available.
The committee also heard that Sir Philip's Arcadia retail empire provided short-term financing to prop up BHS after he sold it to Mr Chappell.
Mr Topp added: "We got consultation from Grant Thornton to work on what a pension proposal would look like that was better than the PPF for the members." He said that he, Mr Topp and Mr Hitchcock came up with Project Vera as an alternative to the PPF proposal.
Mr Topp also said Mr Chappell was on a boat in the Bahamas when BHS's administration was announced. Mr Chappell had claimed he was undergoing eye surgery there at the time.
For his part, Mr Chappell said BHS would have been "saveable", had Sir Philip assisted the firm.
"I think our company was saveable and I think, had Sir Philip had assisted us, we could have saved BHS. We were in the throes of beginning a turnaround proper after a very successful property CVA and we were moving forward," he said.
He added that Sir Philip effectively continued to run BHS even after the sale. Mr Chappell claimed to MPs Sir Philip "genuinely thought" BHS would fail, but sold it nevertheless, adding that the billionaire would have liquidated BHS if he had not sold it. He also said he is looking at launching a legal suit against Arcadia and Sir Philip over a BHS property sale by the tycoon to his stepson. He claimed that BHS missed out on £3.5m because of it.
Mr Chappell said his initial talks with Sir Philip outlined that BHS would pass over "debt free, pension free and with the normalised running capital within the business".
He claimed that Arcadia's position as a secured creditor was used as a "stick" with which to beat him and, ultimately, it was Sir Philip who took the decision to put BHS into administration.
He also accused administrator Duff & Phelps of being "heavily conflicted" because of its close connection with Sir Philip, describing the firm as the billionaire's "pony".
Asked whether he thought Sir Philip was a successful retailer, Mr Chappell said he had been very successful at raising "a lot of money from businesses and taking huge sums out of them".
Asked if he had profited out of his ownership of BHS, Mr Chappell said: "Yes, I have made a profit out of this, but I racked up considerable fees." He also claimed that Sir Philip effectively blocked a rescue attempt by Sports Direct boss Mike Ashley, who appeared before the committee on Tuesday.
"Mike Ashley was going to save the business, but Sir Philip Green was screaming down the phone, saying he didn't want to get involved with Mike Ashley."
He claimed that on hearing of a potential deal, Sir Philip called in a £35m loan, tipping the company into administration.
Hitting back at Mr Topp, he claimed that BHS's trading under the chief executive had deteriorated so badly that he had appointed head hunters to find a new boss and finance director.
Mr Chappell denied that he is going bankrupt again, after it was revealed that he has taken out a £150,000 short-term personal loan, half of which he has yet to pay back.
He also described the £1.5 m taken out of BHS as a "sideshow" in the "grand scheme of things".
He concluded by offering an apology for the chain's collapse, adding: "I am very upset that there are 11,000 people directly and a number of thousand indirectly who have lost their jobs. It's a travesty that that has happened. That is an apology.
"As a majority shareholder I must stand forward and say we were part of the downfall of BHS." Attention will now turn to Sir Philip's appearance in front of the committee, on June 15.