Dominic Chappell knew BHS was insolvent when he bought it for £1 according to The Pensions Regulator.
Following the Financial Reporting Council’s recent damning report into PwC’s now discredited audit of BHS before it was sold in 2015, fresh questions have been raised about Chappell’s knowledge of its financial health before buying.
The report, which lead to PwC being slapped with a landmark fine of £10 million, accused the audit of being “inaccurate” and “misleading” painting a far more positive picture of its financial health at a time when the company was nearing insolvency.
The Pensions Regulator, which played a key role in securing £363 million from its previous owner Sir Philip Green to cover the costs of the £571 million pensions deficit left by BHS’ collapse, has now accused Chappelle of having full knowledge of BHS’s poor financial health when he purchased it.
This is part of the regulator’s bid to secure £9.5 million from Chappell to plug the remaining hole in its pension scheme, arguing that he should have funded the acquisition fees himself as apposed to taking them from BHS.
“Our anti-avoidance action against Dominic Chappell continues,” a spokesperson for the regulator said.
“On 15 January 2018, the Pension Regulator’s determinations panel determined that two contribution notices (in the total sum of circa £9.5m) be issued against Dominic Chappell.
“Under the Pensions Act 2004, Dominic Chappell had 28 days to refer that decision to the Upper Tribunal; he has now made that reference.”
Chappell has hit back at the regulator, stating that: “Had they [PwC] done their job correctly we would never have touched BHS with a barge pole.”
The disgraced auditor responded to Chappell in turn, arguing that the “audit failings did not contribute to the collapse of BHS over one year later.”
This is one of two cases The Pensions Regulator has brought against the former bankruptee Chappell, who was found guilty of failing to provide officials with information on the company’s pension scheme.
Chappell will appeal the conviction in Hove Crown Court later this week, with a re-trial of the case due for September.