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BHS CEO: Dominic Chappell 'threatened to kill me over £1.5m theft' – live BHS former owner Dominic Chappell quizzed by MPs - live
(35 minutes later)
11.39am BST
11:39
Dominic Chappell blames Sir Philip Green for forcing the closure of BHS.
If Philip had assisted us, we could have saved BHS. We were in the process of moving forwards, Chappell claims.
Dominic Chappell says Sir Philip Green had "close relationship with Duff & Phelps, the BHS administrator, and brought them in
He says Green still had a financial claim on BHS (despite having sold it), while the pensions minefield was addressed.
Q: Was it a Sword of Damocles?
It was a stick that we were continually beaten with, Chappell replies.
He also claims that Darren Topp tried to ‘wiggle his way’ into the ownership of BHS.
Remember, Topp claimed this morning that Chappell threatened to kill him, over that £1.5m movement of cash out of the company.
11.37am BST
11:37
Chappell: Fraudster Paul Sutton had "extensive" data on BHS - properties, cashflow, stock levels - assume this came from Philip Green
11.33am BST
11:33
DOMINIC CHAPPELL HEARING BEGINS
Dominic Chappell has taken his seat before MPs to answer (a lot of) questions about the collapse of BHS.
Q: How did you meet Sir Philip Green?
Chappell explains that he met the Arcadia boss (and former owner of BHS, of course) through a gentleman called Paul Sutton (who is a convicted fraudster).
Chappell says Sutton had been working on a deal to buy BHS. And Chappell and his team subsequently began work on the deal -- but found that he didn’t find Sutton credible.
We believe Sutton was hood-winking people, Chappell says, making claims about his links to Sir Philip Green which weren’t true.
Dominic Chappell starts strongly, admitting he was introduced to BHS deal by fraudster Paul Sutton in early 2014
Chappell: Eddie Parladorio was working with Paul Sutton on previous bid for BHS
(Eddie Parladorio is one of the Retail Acquisition directors we heard from earlier)
Related: City ally of Philip Green advised fraudster who tried to buy BHS
Dominic Chappell
Updated
at 11.37am BST
11.23am BST
11:23
If you’re just joining us, then hello :)
Here’s our news story about the remarkable revelations from the current CEO of failed retail chain BHS, and the former finance chief:
Related: Dominic Chappell threatened to kill me, says BHS chief executive
11.21am BST
11:21
The session with Dominic Chappell’s former directors at Retail Acquisitions has ended.
Next up, Chappell himself.
Committee chairman Iain Wright says it could take a long time.... so calls a brief suspension to proceedings. We reconvene at 11.25am.
11.19am BST
11:19
Remember BHS was sold for a £1. Anyone could have bought it. The important issue was did a buyer have the money to fund a turnaround.
11.19am BST
11:19
Frank Field MP asks about BHS’s pension liabilities.
Stephen Bourne says that the original proposal that RAL would buy BHS without its pension liabilities was floated before Christmas 2014.
He denies that the property deals were a later ruse to boost Chappell’s credibility; why would Sir Philip Green need to build up Chappell’s credibility, to himself?
Because it would allow Green to present Chappell as a credible buyer, Field suggests.
11.15am BST
11:15
Stephen Bourne tells MPs that “nothing improper” occurred during the negotiations to buy BHS last year.
Dominic Chappell was running around, trying to find the money, talking to Philip Green, while we focused on other aspects of the deal, Bourne says.
Retail Acquisitions boss says Chappell got BHS deal back on track after being rebuffed after personal negotiations with Sir Philip Green..
11.13am BST
11:13
The MPs are now asking the former Retail Acquisitions (RAL) directors why several “jumped ship” and left RAL at the same time, shortly after the BHS deal
One, Stephen Bourne, says he wasn’t comfortable about new directors chosen by Chappell.
A second ex-director says he hadn’t planned to stay on after the BHS deal. There’s talk of pressure of work from other responsibilities.
Updated
at 11.13am BST
11.09am BST
11:09
The key issue in these complicated property deals is that Dominic Chappell appears to have used the promise of a future profit on Marylebone House to get a loan (from property dynasty ACE), to suggest that he was a serious buyer for BHS, who could have turned the business around.
And that property deal would have been signed off by Sir Philip Green, raising questions about how much he knew about Chappell’s actual financial muscle.
Big big questions over how much Philip Green knew about £35m from Dellalls and mooted Marylebone House deal w Chappell and Dellals
MPs ask Retail Acquisitions whether £35m that established Chappels credibility effectively came from Sir Philip Green. It looks that way
Amazingly, no-one seems to know who owns Marylebone House today.
"Who owns Marylebone House now?" (#bhs HQ) "I really don't know." say all 4 of the Retail Acquisitions witnesses This is unbelievable.
11.01am BST11.01am BST
11:0111:01
This -->This -->
MPs are confused why Philip Green agreed to sell BHS to Chappell for £1 and had parallel agreement to gift him £8.5m. They are not alone...MPs are confused why Philip Green agreed to sell BHS to Chappell for £1 and had parallel agreement to gift him £8.5m. They are not alone...
11.00am BST11.00am BST
11:0011:00
The MPs are trying, hard, to get to the bottom of an £8.5m payment that Sir Phillip Green allegedly promised to pay to Dominic Chappell’s Retail Acquisitions as part of the BHS deal. The MPs are trying, hard, to get to the bottom of an £8.5m payment that Sir Philip Green allegedly promised to pay to Dominic Chappell’s Retail Acquisitions as part of the BHS deal.
The former RAL directors aren’t completely clear about what happened, so I’m frankly confused too.The former RAL directors aren’t completely clear about what happened, so I’m frankly confused too.
But I think the story is that the money – which would have given Chappell a guaranteed profit on Day One of owning RBS – didn’t arrive when expected. But I think the story is that the money – which would have given Chappell a guaranteed profit on Day One of owning BHS – didn’t arrive when expected.
There were then conversations, culminating in a £10m payment from Arcadia in June 2015. This is instead of the £8.5m profit that Chappell was expecting to make on the aborted property deal involving Marylebone House (see earlier post)There were then conversations, culminating in a £10m payment from Arcadia in June 2015. This is instead of the £8.5m profit that Chappell was expecting to make on the aborted property deal involving Marylebone House (see earlier post)
This is complicated, but basically Green agreed to sell non-BHS building to Retail Acquisitions, didnt, so RAL took cut from BHS insteadThis is complicated, but basically Green agreed to sell non-BHS building to Retail Acquisitions, didnt, so RAL took cut from BHS instead
Eddie Parladorio: there was "strong understanding" with Philip Green that he would compensate for not giving £8.5m - hence £10m in June 15Eddie Parladorio: there was "strong understanding" with Philip Green that he would compensate for not giving £8.5m - hence £10m in June 15
For those struggling to keep up with #BHS cesspit, Philip Green allegedly gifted £10m to Chappell, having previously offered £8.5mFor those struggling to keep up with #BHS cesspit, Philip Green allegedly gifted £10m to Chappell, having previously offered £8.5m
Updated
at 11.18am BST
10.49am BST10.49am BST
10:4910:49
Here’s Graham Ruddick’s news story about the remarkable evidence session from BHS’s management this morning:Here’s Graham Ruddick’s news story about the remarkable evidence session from BHS’s management this morning:
Related: Dominic Chappell 'had his fingers in the till', says BHS chief executiveRelated: Dominic Chappell 'had his fingers in the till', says BHS chief executive
10.47am BST10.47am BST
10:4710:47
The committee are kicking the tires on one of the property deals, the sale of Marylebone House.The committee are kicking the tires on one of the property deals, the sale of Marylebone House.
It’s devilishly complicated. But Retail Acquisitions (RAL) directors are explaining that Dominic Chappell had planned to buy the property for £35m and then sell it to ACE (the property dynasty who had lent him funds) for £45m, and to receive £8m in return.It’s devilishly complicated. But Retail Acquisitions (RAL) directors are explaining that Dominic Chappell had planned to buy the property for £35m and then sell it to ACE (the property dynasty who had lent him funds) for £45m, and to receive £8m in return.
But Sir Phillip Green changed his mind, selling the property to someone else, and promising to compensating RAL instead. But Sir Philip Green changed his mind, selling the property to someone else, and promising to compensating RAL instead.
Oliver Shah of the Sunday Times (who’s done some great reporting on BHS) has tweeted the key points:Oliver Shah of the Sunday Times (who’s done some great reporting on BHS) has tweeted the key points:
Retail Acquisitions would have bought Marylebone House from Green for £35m, then sold to Dellal family for £45m, Iain £10m to pay feesRetail Acquisitions would have bought Marylebone House from Green for £35m, then sold to Dellal family for £45m, Iain £10m to pay fees
Dellal family put £35m into Olswang escrow to pay for Marylebone House, which Chappell in turn was going to buy from Green familyDellal family put £35m into Olswang escrow to pay for Marylebone House, which Chappell in turn was going to buy from Green family
This starting to look bad for Green. If true, Green would have allowed Chappell's crew to book a £10m profit from property deal + fund dealThis starting to look bad for Green. If true, Green would have allowed Chappell's crew to book a £10m profit from property deal + fund deal
So Green gifted Retail Acquisitions £8.5m for cancelling Marylebone House deal, according to Stephen Bourne, and left it in BHS.So Green gifted Retail Acquisitions £8.5m for cancelling Marylebone House deal, according to Stephen Bourne, and left it in BHS.
More light shed on our story from weekend: Green paid £10m to RAL last June, £5m went into BHS, £3.5m paid down loans, £1.5m taken by RALMore light shed on our story from weekend: Green paid £10m to RAL last June, £5m went into BHS, £3.5m paid down loans, £1.5m taken by RAL
Q: So, BHS wasn’t sold for £1, it was sold for minus ten million quid?Q: So, BHS wasn’t sold for £1, it was sold for minus ten million quid?
Apparently it’s not as simple as that....Apparently it’s not as simple as that....
UpdatedUpdated
at 10.50am BST at 11.05am BST
10.40am BST10.40am BST
10:4010:40
The committee are now taking evidence from former directors of Retail Acquisitions.The committee are now taking evidence from former directors of Retail Acquisitions.
They are explaining that Goldman Sachs was the “gatekeeper’ to Sir Phillip Green, of the Arcadia Group. They are explaining that Goldman Sachs was the “gatekeeper’ to Sir Philip Green, of the Arcadia Group.
Eddie Parladario - one of Chappell's Retail Acquisitions team agrees with River Rock that Goldman Sachs the "gatekeeper" to Philip GreenEddie Parladario - one of Chappell's Retail Acquisitions team agrees with River Rock that Goldman Sachs the "gatekeeper" to Philip Green
Updated
at 11.05am BST
10.34am BST10.34am BST
10:3410:34
That was the end of the session with BHS’s management. These tweets sum things up.That was the end of the session with BHS’s management. These tweets sum things up.
Extraordinary set of revelations from BHS hearings so far - death threats, fingers in the till and a mythomaniacExtraordinary set of revelations from BHS hearings so far - death threats, fingers in the till and a mythomaniac
So, acc to former BHS bosses - Dominic Chappell was a liar who attempted to steal £1.5m, threatened to kill the CEO and claimed to be ex SASSo, acc to former BHS bosses - Dominic Chappell was a liar who attempted to steal £1.5m, threatened to kill the CEO and claimed to be ex SAS
Highlights start here.Highlights start here.
10.23am BST10.23am BST
10:2310:23
Topp also confirms that Dominic Chappell wasn’t even in the office on the day BHS went into administration.Topp also confirms that Dominic Chappell wasn’t even in the office on the day BHS went into administration.
He told staff he was having an eye operation in America; but actually he was on his yacht in the Bahamas.He told staff he was having an eye operation in America; but actually he was on his yacht in the Bahamas.
That’s unacceptable, Topp says.That’s unacceptable, Topp says.
BHS bosses confirm @DailyMirror story that Chappell was sunning himself on paradise island as chain went bust. https://t.co/GqslEyrzgNBHS bosses confirm @DailyMirror story that Chappell was sunning himself on paradise island as chain went bust. https://t.co/GqslEyrzgN
10.20am BST10.20am BST
10:2010:20
BHS CEO: Chappell threatened to kill me over "£1.5m theft"BHS CEO: Chappell threatened to kill me over "£1.5m theft"
Q: Is it true that Dominic Chappell tried to move £1.5m out of BHS to a company called BHS Sweden?Q: Is it true that Dominic Chappell tried to move £1.5m out of BHS to a company called BHS Sweden?
That is true, BHS CEO Darren Topp confirms. And Topp’s first response when he discovered the money had moved was to call the police.That is true, BHS CEO Darren Topp confirms. And Topp’s first response when he discovered the money had moved was to call the police.
Topp explains that he phoned Chappell, and told him, “that’s theft”.Topp explains that he phoned Chappell, and told him, “that’s theft”.
And – “between expletives”, apparently – Chappell told Topp not to kick off about it.And – “between expletives”, apparently – Chappell told Topp not to kick off about it.
If you kick off about it, I’ll come down there and kill you.If you kick off about it, I’ll come down there and kill you.
Apparently Chappell had claimed to be ex-SAS....Apparently Chappell had claimed to be ex-SAS....
Chappell said that the money was to “look after the home team” (ie, his Retail Acquisition colleagues).Chappell said that the money was to “look after the home team” (ie, his Retail Acquisition colleagues).
The next day, a board meeting was called to discuss firing Topp and another director - another lawyer, who explained to Chappell that the transfer was theft.The next day, a board meeting was called to discuss firing Topp and another director - another lawyer, who explained to Chappell that the transfer was theft.
The money was then returned, minus £50,000 for “fees”, but Topp believes the money has all been recovered.The money was then returned, minus £50,000 for “fees”, but Topp believes the money has all been recovered.
Those funds were meant to pay staff, Topp explains. It’s “disgusting” that it was ever moved.Those funds were meant to pay staff, Topp explains. It’s “disgusting” that it was ever moved.
UpdatedUpdated
at 10.35am BSTat 10.35am BST
10.13am BST
10:13
Q: Why wasn’t the turnaround plan delivered?
CEO Darren Topp argues that BHS’s sales performance was actually better than Marks & Spencer, but agrees that targets weren’t hit.
Michael Hitchcock jumps to Topp’s defence, saying Topp is a good retailer - but obviously performance suffers if you’re spending most of your time trying to tackle a disfunctional owner.
And he then lays into Chappell’s Retail Acqusition again:
You can’t have the uncle as the chairman, the family’s best friend on the board, and Dominic Chappell on the board of BHS... then you’ve already got a majority of friends and family on the board [breaking best practice].
10.09am BST
10:09
Back to the pensions issue......
Former CFO Michael Hitchcock says that there were “credible solutions” to BHS’s pensions deficit on the table, more than once. That could have prevented the fund going into the Pension Protection Fund, meaning pensioners lose some of the benefits.
And he put some of the blame on the PPF and and the TPF (The Pensions Faculty).
They are cumbersome...not commercial.. and not operating in the best interest of the pensioners.
10.05am BST
10:05
Former BHS CEO Richard Price says he learned on 26 January 2015 that Sir Phillip Green was planning to sell BHS.
And Green apparently told them that Chappell’s £1 bid was credible.
Sir Phillip Green gathered BHS board and told them bid was "credible" + significant due diligence had been done, according to fmr #BHS boss
10.00am BST
10:00
The committee are focusing on BHS’s pension liabilities.
Darren Topp explains that a plan was being drawn up, that would have involved a 7% cut to pension entitlements. It would have included a contribution from Green’s Arcadia Group.
But that plan was turned down by the pension regulators, so Arcadia’s contribution was never agreed.
Updated
at 10.02am BST
9.58am BST
09:58
Darren Topp admits that he was “honoured” to be asked to run BHS by Chappell in 2015. But he swiftly realised that all wasn’t well, so engaged Michael Hitchcock to cover the role of finance director.
Hitchcock clearly found the whole experience quite remarkable.
He talks about meetings which were more like tea parties, packed with executives, so nothing could get agreed on the pension liabilities.
Hitchock sums it up:
It was like a Mexican standoff, everyone was dancing around the handbags...
Updated
at 10.02am BST
9.55am BST
09:55
Q: Tell us more about Dominic Chappell’s lies....
If someone stands up in front of you and says they’ve put £10m into the business, and got a property expert to turn things around, and they don’t deliver. That’s lying in my book, says Michael Hitchcock.
Q: So how much money did Retail Acquisitions take out?
RAL took £17m out of the business, fact. Arguably it put £10m back in, fact, replies Hitchcock.
He adds that you could argue that a lot more came out (mentioning a £45m figure) -- but those are the simple facts.
No-one wanted BHS to fail, he adds, including Chappell - who presumably wanted to keep using it as a revenue stream for his other operation.
9.51am BST
09:51
Chappell promised to bring in "big hitting" chairman for BHS. They didnt. At time of deal they were briefing it could be Harriet Green
9.49am BST
09:49
Q: Were you aware of Dominic Chappell’s lack of retail experience?
CEO Darren Topp explains that it was blatantly obvious. So the BHS board needed to be shaken up, with new directors with solid experience.
Chappell kept promising to bring in some heavy-hitters, but...
There was always a reason why it didn’t happen. And it never did.
Chappell argued that his expertise was in property, and in deals -- to raise the finance that BHS needed, explains Topp.
Former CFO Michael Hitchcock then chips in - saying that he believes there was enough value on the BHS balance to raise the funds needed to turn it around, if handled properly.
Updated
at 9.51am BST
9.46am BST
09:46
Chappell accused of being "mythomanic", "fantasist', "Premier League liar" and "Sunday league retailer" - and we're only 40mins in. #BHS
9.46am BST
09:46
Former CEO Richard Price, who resigned just after BHS was sold for £1, is explaining that the company had struggled despite close attention from Sir Phillip Green.
Thus the need for a turnaround plan.
Q: So how much fresh capital money did the turnaround plan show was needed?
It didn’t, Price explains, as we only had a week to draw it up (before the sale to Chappell)