BHS pensions trial hears claims that bin bags full of papers were shredded
Dominic Chappell denies three charges of neglecting or refusing to provide information and documents.
The final boss of BHS told investigators that Sir Philip Green’s company had been shredding “bin bags” full of documents as a takeover loomed, a court has heard.
Former bankrupt Dominic Chappell, 51, was the director of Retail Acquisitions, the company that acquired BHS for £1 from billionaire Sir Philip in 2015.
He is facing legal action from The Pensions Regulator (TPR) after allegedly failing to provide information about two pension schemes when the chain imploded leaving thousands jobless and a black hole in its pension fund.
But, giving evidence at Brighton Magistrates’ Court, the businessman claimed he spent months locked out of the chain’s headquarters with no access to crucial documents.
Agreed facts read to the court of a conversation between Chappell and TPR in August 2016 also revealed Chappell claimed he had become aware of alleged document shredding by Arcadia, Sir Philip’s company.
In the transcript, Chappell said he learnt after taking over BHS that there had been a vehicle used for shredding stationed behind Arcadia’s building.
He told investigators he had heard that “bin bags” full of documents were “thrown in the shredder”, adding: “We didn’t know it until after we bought the company.”
The high-street giant went into administration in April 2016 with a £571 million pension deficit, although Sir Philip later agreed to stump up £363 million to plug the gap.
Chappell is charged with failing three times to give information to TPR over BHS’s pension schemes, which had 19,000 members.
The former racing driver claimed an aggressive stance was taken by the regulator against BHS after the doomed takeover.
He was handed a section 72 notice – a request to provide information to TPR under the Pensions Act – 16 days after the buy out on March 27 2015.
The self-described entrepreneur, dressed in a grey suit and open-neck white shirt, said of the first notice: “We were devastated by the service of the section 72, we found it an outrageous act that was served when we had given the pension regulator every courtesy.
“It was a hostile and deliberate act and it fundamentally affected our business.”
Such a notice, he told the court, was a “powerful document resting on the back of the company”, as it signalled an investigation into wrongdoing.
He continued: “It would be very challenging for any high-profile individual to come into a business that had been served a section 72 as they could be sitting in the seat I am today.”
Costs running into the hundreds of thousands of pounds, along with thousands of man hours, were required to respond to the series of section 72 notices , he said.
Chappell claimed he was locked out of the BHS offices when it plunged into administration, prohibiting him access to relevant documents and forcing him to wait three months to retrieve personal belongings.
He told the court: “The fact of the matter is we simply did not have it.”
He added: “It had never crossed my mind in the slightest not to comply with The Pensions Regulator.”
One section 72 notice related to a request by TPR for information from Chappell about an alleged leak of information to the media from a confidential “warning notice” sent out in November 2016, the court heard.
Chappell clashed with Alex Stein, prosecuting for TPR, over the issue.
He was accused by the prosecutor of failing to pass on information about an episode where he was allegedly contacted by a journalist who claimed to have possession of the document.
In an angry outburst, he continued: “This is a sideshow that is distracting from what happened at the TPR.
“I have no doubt in my mind that the TPR is one of the leakiest departments I have ever dealt with.”
Asked if he had any evidence, he replied: “I have plenty of evidence.”
Chappell became increasingly agitated as he claimed evidence was being held in “secrecy” by TPR so as not to “embarrass Philip Green”.
He had previously described what he thought to be a good working relationship with TPR.
Referring to one meeting, he said: “Is this the meeting where we got on so well they asked me to be a witness, presumably in the prosecution of Philip Green?”
“The cost of this all has been off the scale, the time I have spent doing this off the scale.”
The collapse of BHS had taken a toll on his wellbeing, he earlier told the court, saying: “It has had a dramatic impact on me, my health and my family. I have done everything and more to assist the regulator.”
Chappell, of Clenston Manor, near Blandford Forum in Dorset, denies three charges of neglecting or refusing to provide information and documents, without a reasonable excuse, contrary to the Pensions Act 2004.
The trial continues.