Ex-BHS boss to be prosecuted by pensions watchdog as scandal rumbles on
The on-going scandal around the collapse of BHS in 2016 and its pension fund black hole will see the man who had once hoped to turn it around being prosecuted by the UK’s pensions regulator.
The watchdog will sue Dominic Chappell for failing to provide information for an investigation into its sale on three separate occasions. Although that is a criminal offence, it would result in a fine rather than a jail term.
Chappell, a former bankrupt, led Retail Acquisitions, the firm that bought BHS for £1 from Sir Philip Green in 2015. BHS collapsed a year later leading to a raft of store closures with some former BHS sites still not having been let. It also led to around 11,000 job losses and a pension fund deficit of up to £571 million that affects 19,000 members of the BHS scheme.
He will appear at Brighton magistrates court on September 20 on charges of neglecting or refusing to provide information and documents without a reasonable excuse.
Interest in Chappell has stayed high since the BHS collapse as the store chain’s failure has become intertwined with wider concerns over burgeoning pension fund deficits at a number of large UK firms, as well as what are seen as excessively light regulations around ownership changes at companies with large numbers of employees.
Chappell had no retail experience when he acquired BHS and although he controlled it for little more than a year, Retail Acquisitions received multimillion pound payouts from the retailer.
The Pensions regulator earlier this year signed a £363 million cash settlement with Sir Philip Green to boost the BHS pension fund as politicians from all political parties kept up the pressure for a deal on concerns that the taxpayer would end up footing the bill for the shortfall. But some reports said Sir Philip is also seeking £17 million from Chappell and Retail Acquisitions, although Chappell is fighting that claim as he said the pensions black hole was not his fault.
Frank Field, the MP who has been most vocal in demanding action on the BHS issue and has criticised Chappell in the past, suggested that the pensions regulator may have gone after an easy target in choosing to prosecute him. He said he wants to ensure that the man, who is also being investigated by the government department that looks at bankrupt companies (the Insolvency Service), gets a fair trial.
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