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BHS former owner Dominic Chappell quizzed by MPs - live
BHS former owner Dominic Chappell: 'We may sue Philip Green' – live
(35 minutes later)
12.12pm BST
12.49pm BST
12:12
12:49
Chappell blasts Green over property deal
Dominic Chappell claims that BHS’s landlords were very hard to deal with, after years of being yelled at by Green.
Chappell takes another swipe at Sir Philip Green, saying the Arcadia boss had sold BHS’s Ealing store to a related party - his stepson - and had to issue a clarification to the pensions regulator.
There was a perception that we were Philip’s boys... brought in to take this problem child of Arcadia’s hands, he adds.
I was shocked, Chappell says, and shocked that £3.5m profits that should have gone to BHS went elsewhere.
Dominic Chappell with a classic understatement, says Sir Philip Green has "a slight control issue"
Dominic Chappell says he was "shocked" when found out Green sold Ealing BHS store to stepson
12.44pm BST
Q: Did you raise it with Green?
12:44
Yes. He said “that’s showbusiness,” Chappell replies.
Chappell: Sports Direct were prepared to save BHS
Chappell alleges that Green described property sale to stepson as "showbusiness", and had to retract statement to regulatory body about it.
Boom! Dominic Chappell has told MPs that BHS could have been saved from liquidation, because Mike Ashley of Sports Direct was prepared to step in.
12.09pm BST
Chappell says that Sports Direct was a “willing buyer” for BHS, if it could have avoided the pension liabilities.
12:09
But Green didn’t want the deal to go through, so he called in the administrators by triggering the £35m charge that he still held on BHS.
Dominic Chappell claims BHS failed for three reasons:
Chappell claims Sir Philip Green went "insane" when he found out he was trying to sell BHS to Sports Direct, so called in administrators
1) “Continuous bashing” from the pension regulators and Sir Philip Green - and the regulators inability to reach a deal with RAL separate to Green
According to Chappell, Sports Direct would have given BHS the capital injection it needed. That would have left Greens’ £35m loan “in the long grass”.
2) Trade credit insurance had gone - Green had already said he’d liquidate BHS if he didn’t find a buyer.
But SPD would only do it if the pension regulators agreed that Sports Direct would be “found harmless” for the pension liabilities.
If we didn’t buy it, he would have liquidated it for sure
We worked through the night to get a deal, but the Pension Protection Fund said it needed more time - and then Green served the notice that forced the administration, Chappell claims.
3) Green made a clear pledge that he would provide help with the trade insurance. He didn’t, so we had to find an extra £30m.
Yesterday, Mike Ashley told the BIS committee that he “100%” wanted to buy BHS, but didn’t reveal what went wrong.
12.07pm BST
Chappell placing blame heavily on SPG who resisted sale to Mike Ashley "he went insane" and called in his £35m loan tipping company over
12:07
Good grief. Chappell claims that he only realised the true scale of BHS’s pensions problem after he bought the company (for one shiny pound coin).
Chappell says he was slapped with Section 72 notice from Pensions Regulator the minute of his £1 BHS deal. "That caused us a lot of issues"
Oh Dominic, you should have know, sighs the committee - saying it’s a clear failure of due diligence.
12.05pm BST
12:05
After probing a few more figures, Jeremy Quin MP has totalled that Chappell only had cash assets of around £25m, not the £94m he claimed.
Chappell denies this....
12.03pm BST
12:03
We’ve not heard anything about BHS’s actual day-to-day operations yet:
Listening to Dominic Chappell's evidence; I'm just checking - BHS was a retail chain? Not a commercial property business? Right?
Updated
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at 12.46pm BST
12.02pm BST
12.36pm BST
12:02
12:36
Chappell adds that he received £5m from the Dellal family of property developers (as part of the sale of BHS’s North West House to their ACE company), on top of the £10m from the Green family.
Chappell: I made a profit on BHS
That means the £15m that Retail Acquisitions put into BHS didn’t actually come from his own pocket.
Iain Wright, chair of the BIS committee, turns to the money which Chappell’s Retail Acquisition took out of BHS.
Dominic Chappell is admitting here that Retail Acquisitions put none of own money into BHS - £5m was from Ace, £10m from Sir Philip Green
Q: Given BHS needed working capital, why were you taking money out?
11.58am BST
These were fees that we had incurred in the course of the deal.
11:58
Q: How much have you taken out?
Chappell outlines BHS property deals
I’ll give you a full outline on a spreadsheet
Jeremy Quin MP is probing how much cash Dominic Chappell actually had when he bought BHS.
Q: Give us a flavour now, please
The official documents also show £94m of cash.
No. You can have it as soon as practically possible....
That includes £35m in an Olswang account - where did that come from?
Q: So have you made a profit?
Chappell explains that it is to do with the plan to buy Marylebone House from Sir Phillip Green, and then sell it to the Dellal family of property developers (as we heard earlier).
Yes, I have made a profit, Chappell confirms. But he did work on this business for the last 13 months, incurring substantial fees. So he feels he earned the profit.
[Ie, the Dellal’s had loaned him the £35m, expecting to buy Marylebone House once the deal went through].
Q: How do you feel about the 11,000 people who are losing their jobs?
Chappell claims that Arcadia knew about this - something they denied....
Devastated, Chappell replies.
But Green then came back and said he had a better offer, so he’d compensate me....
He then promises to also give details on how much he received personally.
Dominic Chappell contradicts key evidence from Arcadia's Paul Budge: says Green's team was aware £35m deposit from Dellals was for property
12.29pm BST
Dominic Chappell claims Paul Budge, Arcadia CFO, knew that £35m that established his credibility came from Dellal family.Budge said he didnt
12:29
Q: Quin: The accounts show you expected £8.5m from Green as compensation. Did it show up?
Reminder, you can watch Dominic Chappell’s testimony at the top of this blog. It’s also being streamed here.
It did not, says Chappell, despite being agreed. We eventually received £10m from Green, two months later.
12.28pm BST
Chappell also confirms that a second property, called North West House, was sold to the Dellals.
12:28
And £7m of that sale was transferred to his Retail Acquisitions company.
Here’s a video clip of the jaw-dropping moment this morning, when the CEO of BHS claimed Chappell had threatened to kill him after he spotted a £1.5m transfer out of the company.
Q: Why did it leave BHS?
BHS chief executive: Dominic Chappell threatened to kill me – video https://t.co/ophaDLHayF pic.twitter.com/lCFn0g0OQX
Chappell explains that RAL paid £10m into BHS shortly afterwards.
12.25pm BST
He also confirms that £3.5m of this £10m came as a soft loan from Tina Green.
12:25
That’s Lady Green -- Sir Philip’s wife, who actually owns Arcadia.
Chappell talks about the “enormous lack of investment” at BHS during Green’s tenure - saying some stores had no heating.
11.47am BST
And he blames the rows over BHS’s pension deficit for scuppering his hopes of recruiting a chairman who actually understood retail.
11:47
12.23pm BST
Chappell: We planned to buy BHS without debts and pensions
12:23
Dominic Chappell tells the committee that the original plan, discussed with Arcadia, was to buy BHS “debt free and pension free”.
"I was very open we knew nothing about retail" Chappell - the man who bought BHS. "We bought into management's plan"
Those talks started in August 2014.
"We knew nothing about retailing. We weren't claiming to be retailers," Chappell says
But RAL was disabused of that notion in January 2015, and realised that it would have to take on the pension liabilities.
12.20pm BST
According to Chappell, Arcadia told him £50-75m max was needed to fix #BHS pension. Completely implausible
12:20
Chappell also confirms that Goldman Sachs were Arcadia’s ‘gatekeeper’ -- he had to persuade GS that he was a credible buyer before he could do any due diligence.
On the negotiations with Green, Dominic Chappell says he told the Arcadia boss about his past - including that he had been declared bankrupt in the past (twice, I believe...)
Q: Were you the victim of a classic ‘bait and switch’, asks Conservative MP Jeremy Quin....
Q: Did he know about your lack of retail experience?
Chappell suggests this isn’t the case.
I was very open, Chappell insists. We know nothing about retail.
Updated
12.18pm BST
at 11.59am BST
12:18
11.47am BST
Chappell: Green thought we'd fail
11:47
Q: Do you think Sir Philip Green set you up to fail by selling BHS?
Another jab at Sir Phil:
Philip genuinely thought we would fail, Chappell claims.
Chappell: Green said he couldn't turnaround BHS and overhaul rents because "no one's going to do a deal while I'm sat on the back of a yacht
He claims that the Arcadia boss was hostile to the property CVA which was agreed this year, which lowered BHS’s rental costs.
11.42am BST
He also takes a pop at Michael Hitchcock (who called Chappell a premier league liar this morning), claiming the former finance officer didn’t deliver.
11:42
Hitchcock came in and made a lot of noise that he’d deal with the landlords....He’s a man of many words and very little delivery.
Q: Do you think Sir Philip Green is a successful businessman?
12.15pm BST
He’s very successful at getting rich by taking huge sums of money out of companies, Chappell shoots back.
12:15
DC "SPG has been very successful at raising a lot of money from businesses and taking huge sums out of them"
Chappell losing temper "I'm sorry I was involved in the deal, you weren't" as MPs try to gain clarity on murky financing and promised
[That’s a reference to the £400m of dividends that BHS paid to the Green family]
11.40am BST
11:40
Chappell’s strategy is pretty clear....
Dominic Chappell says Duff & Phelps are "heavily conflicted" as administrators and Philip Green refers to them as "his ponies"
Dominic Chappell's plan already clear - blame Sir Philip, Darren Topp, administrators, everyone else basically
11.39am BST
11:39
Dominic Chappell blames Sir Philip Green for forcing the closure of BHS.
If Philip had assisted us, we could have saved BHS. We were in the process of moving forwards, Chappell claims.
Dominic Chappell says Sir Philip Green had "close relationship with Duff & Phelps, the BHS administrator, and brought them in
He says Green still had a financial claim on BHS (despite having sold it), while the pensions minefield was addressed.
Q: Was it a Sword of Damocles?
It was a stick that we were continually beaten with, Chappell replies.
He also claims that Darren Topp tried to ‘wiggle his way’ into the ownership of BHS.
Remember, Topp claimed this morning that Chappell threatened to kill him, over that £1.5m movement of cash out of the company.
11.37am BST
11:37
Chappell: Fraudster Paul Sutton had "extensive" data on BHS - properties, cashflow, stock levels - assume this came from Philip Green
11.33am BST
11:33
DOMINIC CHAPPELL HEARING BEGINS
Dominic Chappell has taken his seat before MPs to answer (a lot of) questions about the collapse of BHS.
Q: How did you meet Sir Philip Green?
Chappell explains that he met the Arcadia boss (and former owner of BHS, of course) through a gentleman called Paul Sutton (who is a convicted fraudster).
Chappell says Sutton had been working on a deal to buy BHS. And Chappell and his team subsequently began work on the deal -- but found that he didn’t find Sutton credible.
We believe Sutton was hood-winking people, Chappell says, making claims about his links to Sir Philip Green which weren’t true.
Dominic Chappell starts strongly, admitting he was introduced to BHS deal by fraudster Paul Sutton in early 2014
Chappell: Eddie Parladorio was working with Paul Sutton on previous bid for BHS
(Eddie Parladorio is one of the Retail Acquisition directors we heard from earlier)
Related: City ally of Philip Green advised fraudster who tried to buy BHS
Dominic Chappell
Updated
at 11.37am BST
11.23am BST
11:23
If you’re just joining us, then hello :)
Here’s our news story about the remarkable revelations from the current CEO of failed retail chain BHS, and the former finance chief:
The session with Dominic Chappell’s former directors at Retail Acquisitions has ended.
Next up, Chappell himself.
Committee chairman Iain Wright says it could take a long time.... so calls a brief suspension to proceedings. We reconvene at 11.25am.
11.19am BST
11:19
Remember BHS was sold for a £1. Anyone could have bought it. The important issue was did a buyer have the money to fund a turnaround.
11.19am BST
11:19
Frank Field MP asks about BHS’s pension liabilities.
Stephen Bourne says that the original proposal that RAL would buy BHS without its pension liabilities was floated before Christmas 2014.
He denies that the property deals were a later ruse to boost Chappell’s credibility; why would Sir Philip Green need to build up Chappell’s credibility, to himself?
Because it would allow Green to present Chappell as a credible buyer, Field suggests.
11.15am BST
11:15
Stephen Bourne tells MPs that “nothing improper” occurred during the negotiations to buy BHS last year.
Dominic Chappell was running around, trying to find the money, talking to Philip Green, while we focused on other aspects of the deal, Bourne says.
Retail Acquisitions boss says Chappell got BHS deal back on track after being rebuffed after personal negotiations with Sir Philip Green..
