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Dominic Chappell to fight legal action forcing him to pay BHS pensions Dominic Chappell to fight legal action forcing him to pay BHS pensions
(35 minutes later)
Dominic Chappell, the former owner of BHS, has pledged to fight legal action by The Pensions Regulator designed to force him to pay millions of pounds into the failed retailer’s pension scheme, saying the black hole in the scheme was not his fault. Dominic Chappell, the last owner of BHS, has pledged to fight legal action by the Pensions Regulator designed to force him to pay millions of pounds into the failed retailer’s pension scheme, saying the black hole in the scheme was not his fault.
The regulator has agreed a £363m cash settlement with Sir Philip Green to rescue the BHS pension scheme and halted legal proceedings against the billionaire. However, it is continuing with legal action against Chappell and his company Retail Acquisitions and is understood be seeking as much as £17m. The regulator has agreed a £363m cash settlement with Sir Philip Green to rescue the BHS pension scheme and halted legal proceedings against the billionaire. However, it is continuing with legal action against Chappell and his company Retail Acquisitions and is understood to be seeking as much as £17m.
Green owned BHS for 15 years until he sold it to Chappell, a former bankrupt with no retail experience, for just £1 in March 2015. Retail Acquisitions received payments of up to £25m from BHS despite owning the department store chain for just 13 months until it collapsed. Green owned BHS for 15 years until he sold it to Chappell, a former bankrupt with no retail experience, for just £1 in March 2015. Retail Acquisitions (RAL) received payments of up to £25m from BHS despite owning the department store chain for just 13 months until it collapsed.
A spokesman for Retail Acquisitions said: “Any action brought by The Pensions Regulator will be robustly defended because RAL [Retail Acquisitions] did not cause or add to the pension deficit, that shortfall was built up during the previous ownership.” A spokesman for Retail Acquisitions said: “Any action brought by the Pensions Regulator will be robustly defended because RAL did not cause or add to the pension deficit, that shortfall was built up during the previous ownership.”
The failure of the retailer led to the loss of 11,000 jobs and left a £571m pension deficit. A high-profile parliamentary investigation into the demise of BHS concluded that the company had been systematically plundered by its owners and accused Chappell of having “his fingers in the till”. The failure of BHS led to the loss of 11,000 jobs and left a £571m pension deficit. A high-profile parliamentary investigation into its demise concluded that the company had been systematically plundered by its owners and accused Chappell of having “his fingers in the till”.
The Retail Acquisitions spokesman said: “Dominic Chappell is currently working very hard with the liquidator to recover and preserve nearly fifty million pounds, which will benefit the creditors and BHS pensioners.” The Retail Acquisitions spokesman said: “Dominic Chappell is currently working very hard with the liquidator to recover and preserve nearly £50m, which will benefit the creditors and BHS pensioners.”
The ongoing enforcement action by The Pensions Regulator shows the settlement with Green is not the end of one of the biggest corporate scandals in Britain. The collapse of the company is still being investigated by the Insolvency Service - which could recommend that former directors of BHS are banned from being company directors in Britain - as well as the Financial Reporting Council. The Serious Fraud Office is also considering whether to launch a formal investigation. The ongoing enforcement action by the Pensions Regulator shows the settlement with Green is not the end of one of the biggest corporate scandals in Britain. The collapse of BHS is still being investigated by the Insolvency Service which could recommend that former directors of BHS are banned from being company directors in Britain. The Financial Reporting Council is also looking into the collapse, while the Serious Fraud Office is also considering whether to launch a formal investigation.
The deal between Green and The Pensions Regulator has received a mixed reception. Although the settlement is endorsed by the trustees of the BHS pension scheme, workers are still likely to suffer cuts to their pension benefits. The Pensions Regulator estimates that workers will on average receive around 88% of the value of their original benefits in a new pension scheme created by the settlement. This is a better outcome than if the BHS pension scheme had entered the Pension Protection Fund, a lifeboat for failed pension schemes, where workers would have received an estimated 75% to 79%. The deal between Green and the Pensions Regulator has received a mixed reception. Although the settlement is endorsed by the trustees of the BHS pension scheme, workers are still very likely to have cuts to their pension benefits.
Green initially pledged to “sort” the problems facing the BHS pension scheme last June when he was questioned by MPs. He has already paid over £343m into an escrow account as part of the settlement. An additional £20m will be spent on expenses and implementing the changes to the BHS pension scheme. The Pensions Regulator estimates that workers will on average receive about 88% of the value of their original benefits in a new pension scheme created by the settlement. This is a better outcome than if the scheme had entered the Pension Protection Fund, a lifeboat for failed pension schemes, where workers would have received an estimated 75% to 79%.
Green initially pledged to “sort” the problems facing the BHS pension scheme last June when he was questioned by MPs. He has already paid more than £343m into an escrow account as part of the settlement. An additional £20m will be spent on expenses and implementing the changes to the BHS pension scheme.