Over a third of an £8.4m loan taken out of BHS by its new owners in March last year went to four directors who were part of the consortium, giving them a multimillion-pound gain just days after acquiring the beleaguered department store chain.
According to The Guardian, around £3m was shared between four directors of Retail Acquisitions Ltd. Those were Dominic Chappell, who led the buyout of BHS, Eddie Parladorio, Mark Tasker and Stephen Bourne, who has since resigned. It is understood that Chappell received the largest slice of the pie.
Retail Acquisitions took the loan out of BHS days after buying the business for £1 from Arcadia tycoon Sir Philip Green, which it cited was for professional and financing fees.
The payment to the directors could anger landlords who are being asked to accept large reductions their rent by BHS, as well as thousands of head office and store staff whose jobs are at risk. Retail Acquisitions is made up of lawyers, accounts and relatively unknown financiers. Chappell has been declared bankrupt twice.
The loan was paid out to Retail Acquisitions before the new leadership team of BHS was formed, The Guardian writes. That team, fronted by Chief Exec Darren Topp, is trying to revive the company through a company voluntary arrangement and a restructuring of its pension fund.
The pension fund had a deficit of £207m at the time of the last published accounts, although a triennial valuation scheduled to be completed by the end of June is expected to show it is now significantly more than this.
BHS is in discussions about it entering the Pension Protection Fund, a lifeboat for schemes connected to struggling businesses. As part of the restructuring, Green, the former owner of BHS, could pay £80m into the scheme. This would include £40m in cash and £40m as a loan from his retail business Arcadia, secured against assets.
BHS’s pension fund has above 20,000 members, with the retailer employing over 10,000.