Sir Philip Green pledged to resolve the pension problems facing BHS before selling it and broke promises on supporting the new owner, according to the man who bought the department store chain from the billionaire tycoon.
In fresh evidence submitted to MPs, Dominic Chappell said that his consortium Retail Acquisitions had bid for BHS on the basis that the company would be debt free and that Green had promised to help the new owner to secure credit insurance, which is vital for the survival of retailers.
Chappell made the submission to MPs on the eve of a debate in the House of Commons about whether Green should keep his knighthood.
Asked by the Guardian whether Green should be stripped of his title, Chappell said: “Yes he should. He pushed the business over and he did not stick to his word. He is a bully and a nasty individual. I am bitter about what has happened. There are 11,000 people out of work that would not have been if he had stuck to his word, and there is carnage on the high street.”
Chappell controversially bought BHS for £1 from Green in March 2015 despite having been declared bankrupt three times and having no experience of running a high street retailer. The company collapsed just 13 months later, but Retail Acquisitions received payments of at least £17m from the retailer, according to evidence seen by MPs.
The demise of BHS led to 11,000 job losses and left a £571m pension deficit. Its failure is already under investigation by the Insolvency Service and the Pensions Regulator, while the Serious Fraud Office is also conducting preliminary inquiries into the demise of BHS and the actions of Retail Acquistions.
Green told ITV this week that selling BHS to Chappell was an “honest mistake” and that he was “very, very, very sorry”.
In his new evidence, Chappell claims that Retail Acquisitions “provided substantial and valuable services to BHS” and “raised substantial money and procured substantial savings for BHS in its reconstruction of the business”. He denied there had been improper financial dealings on the part of Retail Acquistions.
He added: “RAL’s [Retail Acquistions’] bid was predicated on the basis that BHS would be debt free and that any exposure to the pension would be extremely limited and be covered by contributions from its day-to-day trade.
“Expert advice was taken by RAL prior to purchase concerning the pension. It was stated by all, including Arcadia [Green’s retail business] and Sir Philip Green, that the pension was in the process of being sorted and was not something that the new owners and manager of BHS would be liable for, provided BHS continued to make the annual contributions for the yearly shortfall and continued engaging with the pension trustees.”
Chappell said Retail Acquisitions was “assured by SPG [Sir Philip Green] that there were negotiations under way” with the Pensions Regulator about a pensions settlement. However, he added: “It became clear that SPG/Taveta [Green’s investment company] and tPR [the Pensions Regulator] were entrenched and little could be done by RAL/BHS whilst that position remained.”
Chappell said that when the Pensions Regulator launched a formal investigation into BHS after Green sold the business it reduced the possibility of securing emergency funding “substantially”. He said that Retail Acquisitions “did not fully appreciate the severity of the detrimental effect” from the investigation.
On credit insurance, which offers financial protection to suppliers when selling their goods to a retailer, he added: “RAL was promised assistance by SPG/Taveta/Arcadia in procuring trade credit insurance.
“A guarantee by Arcadia would have meant that BHS would be creditworthy and suppliers would be able to supply goods to it without demanding payment in advance for goods. Without trade credit insurance, no substantial retail business can survive.”
A spokesman for Green and Arcadia said they had no plans to make a statement about the MPs’ debate and Chappell’s comments.
