Claims ex-BHS boss knew chain was bust when he bought it
EX-BHS boss Dominic Chappell knew the chain was insolvent when he bought it from retail mogul Sir Philip Green, the pensions watchdog is claiming.
Former racing driver Mr Chappell bought BHS for £1 in 2015, just over a year before it crashed into administration with the loss of 11,000 jobs.
Fresh questions about the acquisition have emerged after the Financial Reporting Council said BHS could have been insolvent when it was sold, and slapped PwC with a £10 million fine for its discredited audit of the company ahead of the deal.
The Pensions Regulator is now arguing Mr Chappell knew the company was bust at the point of sale, as part of its bid to seize £9.5 million from him for the BHS pension fund, sources told the Press Association.
The regulator claims that, because of this, he should have funded the acquisition fees himself, rather than taking the cash out of BHS after the acquisition.
It is understood that the regulator's contribution notice relates to around £8 million in professional fees to firms such as Grant Thornton and Olswang, and £1.5 million that Mr Chappell extracted himself.
Mr Chappell is challenging the regulator, saying he was unaware of the true state of finances at BHS.
It has been reported that Grant Thornton and Olswang were not given access to group accounts when they performed due diligence on the BHS sale and relied largely on information certified by PwC.
Mr Chappell said: "Had they [PwC] done their job correctly we would never have touched BHS with a barge pole."
A spokesman for PwC said: "The audit failings did not contribute to the collapse of BHS over one year later."
The Pensions Regulator has dropped all action against Sir Philip after the Topshop boss contributed £363 million to the BHS pension fund black hole.
The Insolvency Service has also stopped short of seeking to ban Sir Philip from acting as a company director.
Mr Chappell, however, is being subjected to disqualification proceedings.
The former racing driver is also embroiled in a separate case with the Pensions Regulator, having been found guilty of failing to provide officials with information on the BHS pension scheme.
Mr Chappell will appear in Hove Crown Court on Friday as part of an appeal against the conviction, with a re-trial of the case due to take place in September.
A spokesman for the Pensions Regulator said: "Our anti-avoidance action against Dominic Chappell continues.
"On January 15 2018, the Pension Regulator's determinations panel determined that two contribution notices (in the total sum of circa £9.5m) be issued against Dominic Chappell.
"Under the Pensions Act 2004, Dominic Chappell had 28 days to refer that decision to the Upper Tribunal; he has now made that reference."
BHS, which operated four stores in the north, collapsed in 2016. Earlier this week The Irish News revealed that department store Guineys is to be the first tenant at the retailer's former site at Castle Place in Belfast city centre.