A disgraced entrepreneur has today been ordered to pay £9.5million into the pension schemes of failed high street chain BHS after an unsuccessful appeal.
Former bankrupt Dominic Chappell bought the retailer for £1 from Sir Philip Green 15 months before it collapsed with the loss of 11,000 jobs and a £570million pensions deficit.
The Pensions Regulator said today that his appeal against two contribution notices in which he was ordered to pay £9,542,985 – first made in January 2018 – was struck out at the Upper Tribunal.
The watchdog said the decision at the Upper Tribunal, equivalent to the High Court as a court of record, means the BHS pensions scandal is ‘coming to a close’ nearly four years after the retailer hit the wall.
The regulator will now look to recover the money from Mr Chappell for two pension schemes.
Former BHS owner Dominic Chappell (pictured at another court appearance in October last year) was today ordered to pay £9.5million into BHS pensions schemes
After BHS collapsed in 2016, the Regulator 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 billionaire Green in order to rescue the scheme.
However Chappell, from Blandford Forum in Dorset, was accused of failing to hand over vital documents to the Regulator as they sought to stabilise the pension fund.
The Pensions Regulator took him to court charging him with three counts of neglecting or refusing to provide documents, without a reasonable excuse, contrary to the Pensions Act 2004.
During the court hearing in January 2018, the former racing driver claimed he was being made a ‘scapegoat’ for the failure of the high street giant and said he wished he had never bought it.
Sir Philip Green (pictured above in May last year) sold Dominic Chappell department chain BHS for just £1 in 2015
Representing himself at Hove Crown Court, he said that unlike billionaire Green he did not have the money to make the problem go away.
He said: ‘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 £4.5million to the pension fund.
However he was convicted of failing to hand over documents to Regulator and ordered to pay a £50,000 fine and £37,000 court costs.
BHS was founded in 1928 and employed around 11,000 members of staff with 164 outlets
And he was later handed a bill of almost £10m to make up the BHS pensions shortfall.
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 TPR 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.’
It marks the latest headache for Mr Chappell, who was banned from running a company for 10 years by the Insolvency Service last November and faces a trial later this year over allegations of £500,000 of tax fraud, which he denies.
Mr Chappell – a former bankrupt – was the architect of Retail Acquisitions’ purchase of BHS four years ago.
Sir Philip owned BHS for 15 years before selling it to Mr Chappell, during which time the Green family and other shareholders are said to have collected £580 million from the chain in dividend payouts, rental payments and interest on loans.
On Mr Chappell’s failed pensions payment appeal, AJ Bell senior analyst Tom Selby said: ‘This sorry saga is one step closer to being resolved.
‘Despite this, thousands of former BHS workers will still understandably feel aggrieved that they will receive lower pensions than they had previously been promised.’
Former staff members welcomed the news the extra money had been secured.
One former shop worker said: ‘It has been a long drawn out affair but I’m pleased Chappell has been told he has to make up the shortfall.
‘For many workers who spent decades paying into the company pension fund it will be a weight off their shoulders to know their pensions are safe.’