Dominic Chappell bought BHS for £1 from Sir Philip Green after scribbled calculations on piece of paper
Damning report says the company board members exploited the high street chain for their personal gain
THREE-TIMES bankrupt playboy Dominic Chappell – who bought BHS from Sir Philip Green for £1 – effectively had “his hand in the till” as the company collapsed around him.
This is the conclusion of the parliamentary inquiry into the collapse of the store group, which said he paid himself and his fellow directors “lavish” rewards.
The joint report of two Commons select committees said Mr Chappell - a former bankrupt with no experience in retail – had exploited the company for his own personal gain.
BHS was bought by Retail Acquisitions Ltd (RAL) - a company owned by Mr Chappell - in March 2015 and 13 months later it was placed in administration with 11,000 jobs on the line and 20,000 pensioners facing substantial cuts to their entitlements.
While Mr Chappell had been aware the pension scheme was heavily in deficit at the time of the purchase, the report said he had not known the full extent of the shortfall as Sir Philip Green had "acted to conceal the true state of the problem".
It said, however, that did not mean Mr Chappell and the RAL directors should be absolved from blame for the plight of the pension scheme.
The report said: "They accepted responsibility for it with a negligent and cavalier disregard for the risks and potential consequences.
“This negligence continued into their incompetent and self-serving ownership of the company.”
Once in charge, Mr Chappell and the RAL directors set about enriching themselves while failing to bring in any retail expertise or address the company's long-term under-performance - to the dismay of the BHS management.
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"Dominic Chappell was out of his depth.
“He was over-optimistic to the point of arrogance.
"In putting his 'home team' first, he and his fellow directors were personally enriched as BHS failed around them.
“In effect, he had his hands in the till.
"His description of £2.6 million that he personally took, in addition to an outstanding £1.5 million family loan, as 'a drip in the ocean' is an insult to the employees and pensioners of BHS that he let down,” the report said.
It added: "RAL board members exploited BHS for their personal gain and Dominic Chappell was the worst culprit.
"The suspicions of BHS managers that RAL were more intent on taking money from the business than investing in it were well founded, as evidenced by the £11 million charged by RAL to BHS in the form of salaries and fees."
And the parliamentary inquiry into the collapse of the store group found directors were presented with an unrealistically "rosy" picture of the sale of BHS.
The report includes a copy of a handwritten balance sheet prepared by finance director Paul Budge for the board of the Taveta group - the holding company owned by Sir Philip Green's wife Lady Tina Green which sold BHS to Dominic Chappell.
The note, which was signed by Sir Philip and Mr Chappell, presented a company unencumbered by substantial debt, with a secure pension scheme and a healthy "day one" balance sheet of £94 million.
"The reality was very different," the report said.
"It was patently obvious that there was simply not enough cash in BHS to give it a realistic chance of medium term survival."
Mr Chappell has not yet commented on the report’s findings.