Ex-BHS boss Dominic Chappell ordered to pay £87,000 in pensions case

Ex-BHS boss Dominic Chappell ordered to pay £87,000 in pensions case

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The former owner of BHS, Dominic Chappell, has been ordered to pay a £50,000 fine and £37,000 court costs for failing to disclose vital details to the pensions watchdog as part of its investigation into the collapse of the high street chain.

The fine – which Chappell said he could not pay because he had “no funds” – comes on top of a demand from the Pensions Regulator (TPR) for £10m to help plug the hole in BHS’s pension fund.

Thrice-bankrupt Chappell, 51, bought the high street chain from the billionaire Sir Philip Green for just £1 in March 2015. The company crashed just 13 months later with the loss of about 11,000 jobs and 164 stores.

TPR, which has a responsibility to safeguard pensions, moved to protect the pensions of 19,000 members. Just days after the company collapsed, Chappell was ordered to hand over hundreds of documents in relation to the £571m pension blackhole at BHS.

When he failed to comply, TPR charged Chappell with neglecting or refusing to respond to three section 72 notices to provide information and documents in April and May 2016 and in February 2017.

In the first prosecution of its kind, Chappell of Blandford Forum, Dorset, was hauled before a court last month. He was found guilty of all three charges and faced a maximum sentence of an unlimited fine for failing to comply with the notices. Chappell appeared at Barkingside magistrates court where he was fined £15,000 each for the first two charges (£30,000) and £20,000 for the last charge, with £37,430.84 court costs.

He had earlier told the court: “I have no funds as it stands.” He said there was a perception he had “made millions out of BHS” but he had actually been left almost penniless by the collapse.

Alex Stein, prosecuting, said Chappell claimed he had no assets whatsoever other than a share in a property. Chappell was asked to give evidence in the witness box under oath over his wealth and assets.

BHS.



BHS crashed in 2016 with the loss of around 11,000 jobs and 164 stores. Photograph: Peter Nicholls/Reuters

He told the court he had a monthly income of about £2,700-£3,000 acting as a consultant to a small cosmetics company. But he claimed he had extensive outgoings, of almost £9,000. This was made up of: £3,800 a month rent on his Dorset home; £2,666 a month leasing a 2017-plate Range Rover; and £2,500 a month school fees for his two children, aged eight and 12, on which he was in arrears.

He told the court: “I’m an entrepreneur. It’s the nature of the business. There are boom times and slack times. This is a slack period where I have huge amounts of cash flooding out of the door in relation to legal fees.

“I have no way of paying a large fine at the moment but I could speak to people to borrow a loan.”

He said he had endeavoured to fully comply with the TPR requests for information and documents and had spent about £250,000 in legal fees in the wake of the BHS collapse.

The fine comes just weeks after Chappell, a former racing driver, was handed a formal demand for £10m from TPR as it attempted to plug the failed retailer’s pension fund. The TPR has already agreed a deal with Sir Philip Green that he should pay £363m towards the pension deficit.

District judge Gary Lucie said: “He is not being sentenced in any way for the collapse of BHS or the pension funds, just the failure of him to comply with demands over the pension funds.”

He said the court must send a message “to those in positions of power” that a failure to comply with TPR demands would lead to a substantial penalty.

He said: “There was a complete lack of remorse on Mr Chappell’s part. The fine should therefore reflect that. In my view there has not been full and frank disclosure of his means. I’m not impressed by the lack of detail.”

The judge proposed he pay £2,500 per calendar month. If Chappell does not have the means to pay the fine, it could lead to him being declared bankrupt for the fourth time.

Nicola Parish, of the TPR, said: “We prosecuted Dominic Chappell because, despite numerous requests, he failed to provide us with information we required in connection with our investigation into the sale and ultimate collapse of BHS.

“Choosing not to comply with our section 72 notices has now left him with a criminal record and a bill of £50,000, both of which he could have avoided if he had simply done what was required of him.”

After the case, Chappell’s lawyer, Michael Levy, said the businessman was appealing against his conviction on three charges of failing to provide documents to the TPR.



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