Belfast Telegraph

UK Website Of The Year

Dominic Chappell 'took a bit of a punt' in BHS purchase

Published 25/05/2016

Administrators are considering several bids for collapsed department store chain BHS
Administrators are considering several bids for collapsed department store chain BHS

The man who acquired BHS for £1 from billionaire Sir Philip Green was taking a "punt" on the successful turnaround of the firm, MPs have been told.

Andrew Frangos of Cornhill Capital, the company tasked with finding funding for twice bankrupt Dominic Chappell, said it was "a bit of a punt" when assessing whether his proposals for the retailer and his wider ambitions were realistic.

Mr Frangos added: "We're interacting with Dominic, we're thinking this is hugely ambitious, is it real, does it have a realistic chance of success? For us, it was a bit of a punt."

Mr Chappell's ambitions also included buying other retailers in Switzerland and the UK, MPs were told.

MPs from the Pensions and Business committees are investigating events surrounding the collapse of BHS, which fell into administration in April, putting 11,000 jobs at risk and leaving a £571 million pension fund black hole.

Earlier, MPs heard that BHS's pension trustees had "significant concerns" over the purchase by Retail Acquisitions, the consortium led by Mr Chappell.

The trustees sought assurances that it had enough working capital before it acquired the firm from Sir Philip.

Chris Martin, chairman of the pension trustees, said: "We sought assurances that they had working capital."

Sir Philip and Mr Chappell, who will be grilled by MPs in June, have also come under fire - Sir Philip for paying a £400 million dividend to his family from the business and over his management of the pension scheme, and Mr Chappell for sucking management fees out of BHS before its collapse.

Mr Chappell did not respond to a request for comment.

The hearing comes as it emerged that Greg Tufnell, a former Mothercare boss and the brother of ex-England cricketer Phil Tufnell, has expressed an interest in buying the stricken retailer.

Mr Tufnell has reportedly secured financial backing from Portuguese investors as administrators Duff & Phelps mull over several bids for the department store chain.

A group led by Mr Tufnell, including banker Nick de Scossa and Jose Maria Soares Bento, registered a new firm called Richess Group Limited at Companies House earlier this month.

Other potential bidders include Matalan founder John Hargreaves, Poundstretcher and Mike Ashley's Sports Direct.

The committees also heard from Margaret Downes, the former chairwoman of the pension trustees. She said that despite the ballooning deficit, Sir Philip refused to put more than £10 million per year into BHS' pension scheme.

"He wasn't prepared to give more money than £10 million a year," she said.

Ms Downes was chairwoman of the scheme for 13 years, during the period when Sir Philip collected the dividends.

She added, however, that Sir Philip took a "caring approach" to pension scheme members.

Read More

From Belfast Telegraph