Jun 8, 2016
BHS chief says retailer's owner Dominic Chappell threatened to kill him
Jun 8, 2016
The chief executive of BHS told British lawmakers that Dominic Chappell, the former bankrupt who bought the company in 2015, threatened to kill him after being confronted about cash transferred out of the retailer that is now being wound down.
Appearing at a parliamentary hearing on Wednesday, CEO Darren Topp was scathing in his assessment of Chappell, whose Retail Acquisitions Ltd (RAL) bought BHS from billionaire Philip Green for 1 pound in March 2015.
Topp said that Chappell had neither the financial backing nor the retail skills needed to revive the struggling company and that the BHS owner had threatened to kill him when confronted about the transfer of 1.5 million pounds ($2.2 million) to a separate business owned by RAL.
Topp said he believed the transfer to have been an act of theft, adding that the money was eventually returned.
In the joint session of parliament's Work and Pension and Business select committees, Topp said he was told: "'If you kick off about it, I'm going to come down there and kill you'."
Chappell told the same MPs in a later session that the money was needed to pay advisers to BHS.
"It was a challenging time and we did challenging things," he said, referring to Topp's allegations about the cash transfer.
Chapell, who was not asked directly about Topp's death-threat accusation, admitted that he had made a profit from his ownership of BHS but refused to provide a figure, telling the MPs that he would provide a spreadsheet at a later date.
Administrators last week started to prepare the closure of the clothing and homewares chain after they failed to find a buyer for the 88-year-old business.
Chappell told the hearing that he was partly responsible for the company's collapse and described the associated 11,000 job losses as a "travesty". But he said that retail tycoon Green and the BHS management needed to share the blame.
"I am very upset that it has happened and it was avoidable," Chappell said. "As majority shareholder and owner of BHS, I must stand forward and say we were part of the downfall of BHS."
Topp had initially believed that Chappell could turn around the company.
'FINGERS IN THE TILL'
"We needed somebody who could raise finance and we needed somebody who could deal with our property portfolio," Topp told the committees.
"Unfortunately, as time progressed, that unravelled in terms of that promise and it became clear to us that rather than putting money in, he (Chappell) had his fingers in the till."
Chappell, however, maintained that his turnaround plan based on a restructuring of the BHS property portfolio had been "credible and viable" but said he had been stymied by the group's pension deficit and a failure on the part of Green to make good on a promise to provide trade credit insurance to suppliers.
Trading at BHS continued to deteriorate, losing more than 1 million pounds a week, Chapell told the hearing.
Chappell also said that Green continued to wield control over the business through a 35 million pound loan. Chapell said the loan was used as a "stick to beat us with" and that it enabled Green to call in administrators and scupper a last-ditch rescue by rival retail billionaire Mike Ashley, the owner of Sports Direct (SPD.L).
A spokesman for Green rebutted several of Chappell's claims, saying that Green had been unaware of any bid by Mike Ashley, that he did not prevent RAL meeting with pension regulators and that it was BHS that called in the administrators.
"Sir Philip and his family business group had invested substantially in BHS and at the time of sale had provided significant funding and gave RAL very opportunity to succeed in its turnaround plan," the spokesman said.
Green is scheduled to appear before the committees next week to answer questions.
His Arcadia Group, meanwhile, is being investigated by Britain's pensions regulator to establish whether it had sought to avoid its responsibilities in the sale of BHS and should be pursued for a contribution to make good the retailer's 571 million pound pension deficit.
($1 = 0.6872 pounds)
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