The Pensions Regulator’s “complex investigation”

News emerged this week that HM Revenue & Customs (HMRC) has allegedly arrested Dominic Chappell – the businessman who bought BHS for £1 from billionaire tycoon Sir Philip Green.  

The alleged arrest came on the eve of a High Court deadline for him to provide evidence about why £6million is missing from BHS’s balance sheet.  If he fails to submit the evidence, administrators could try to seize control of his company, Retail Acquisitions, which borrowed funds from BHS.

However, this is not the only problem he faces, as The Pensions Regulator (“TPR”) has confirmed that it has formally begun enforcement action to seek redress on behalf of the BHS pension schemes after a “complex investigation”. 

The regulator has sent 330-page ‘Warning Notices’ to Mr Chappell and Sir Philip detailing why it believes they should be liable to support the BHS pension schemes following the sale of the business in March 2015 and its subsequent insolvency.

Since TPR initiated its anti-avoidance investigation in Mach 2015, almost 100,000 documents have been reviewed and investigators have held meetings and negotiations with ‘various parties and stakeholders’.

BHS collapsed into administration in April, leading to the loss of 11,000 jobs and leaving a pension deficit of £571million. 

Sir Philip had controlled BHS between 2000 and 2015, during which time his family and other shareholders collected more than £580million before they sold the stores in March 2015 to Mr Chappell.  Meanwhile, Retail Acquisitions collected an estimated £17m from BHS despite owning it for just 13 months until it fell into administration.

If there is anything untoward in the business dealings prior to the insolvency, a forensic investigation will almost certainly discover what happened and when, as the investigators will have unearthed every scrap of evidence and made a detailed study of bank transfers and cash movements.  

Author: Roger Isaacs, 18 November 2016

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