The liquidators of BHS are investigating the conduct of its previous owners, Sir Phillip Green and Dominic Chappell, prior to the company’s insolvency.
Whilst there is a duty to investigate the directors of insolvent firms, sources told the Guardian that FRP Advisory was in the midst of a “massive exercise in data collation”, beyond the scope it usually conducts.
Retail giant Sir Philip Green owned the BHS chain for 15 years until selling it to Dominic Chappell, who was previously bankrupt, for £1. BHS went into administration in April 2016, after being owned by Chappell for just over one year.
BHS collapsed into administration last April, causing 11,000 jobs to be lost and leaving a £571 million pension deficit. Prior to this, the Green family and other shareholders collected at least £580 million from BHS in various payments, with Chappell’s company, Retail Acquisitions, taking up to £25 million.
A spokesman for FRP told the Guardian: “We will be continuing our process of making recoveries through liquidation on behalf of all creditors and continuing with our statutory duties.”
“The concurrent administrators [FRP] have commenced their enquiries into a number of historic matters of concern and key transactions, including those raised by the parliamentary enquiry into the company’s failure, and they are working with their legal advisers, Jones Day, to determine appropriate avenues of further investigation.
“It would not be appropriate to comment in detail on the nature and level of the concurrent administrators’ investigations at this juncture. However, within the parameters of the court order, these have included a review of the possible claims and challenges available to an insolvency office holder pursuant to the Companies Act 2006 and Insolvency Act 1986, including those relating to antecedent transactions and wrongful trading.”
A parliamentary inquiry after the collapse found Green and Chappell’s running of the store to be at fault in the running of the business. In particular, the inquiry highlighted the sale of BHS’s shop in Ealing to a company run by Green’s stepson, Brett Palos, less than a week before the high-street chain was sold to Retail Acquisitions.
Palos bought the store for £6.9 million through his company Thackeray Estates, selling it just three months later for a £3 million profit.