Dominic Chappell must pay £9.5m into BHS’ pension schemes after committing actions detrimental to their funding, the Upper Tribunal has ruled.
The former owner of BHS, who has been declared bankrupt three times, has failed in his challenge against a contribution notice issued by The Pensions Regulator (TPR) about two years ago.
The money, which will be collected by the Pension Protection Fund, is designed to compensate the schemes for what TPR's determinations panel described as "a series of acts or failures to act" that were "materially detrimental".
These included his initial acquisition of BHS from Sir Philip Green for £1, management decisions of the company, the appointment of inexperienced board members, the implementation of an inadequate business plan, and the way money was extracted and distributed to Chappell's advisers, company directors, and family members.
For example, it was noted that Chappell benefited directly or indirectly from a net total of payments of £4.1m while a further £2.4m in professional fees was extracted from BHS for the benefit of Retail Acquisitions Limited, a firm owned by Chappell.
The funds will be distributed for the benefit of members of the former retail giant's two pension schemes, with the main scheme set to receive £9.4m and the executive scheme in receipt of £95,430.
TPR executive director of frontline regulation Nicola Parish said the regulator was "pleased" with the Upper Tribunal's decision.
"This case illustrates how TPR is willing to pursue a case through the courts to seek redress for pension savers," she continued. "It illustrates the situations our anti-avoidance powers were designed to meet and which allow us to protect the retirement incomes that savers deserve."
TPR said this action ended its anti-avoidance enforcement against Chappell. It follows a separate case where he was ordered to pay £124,000 after failing to provide information to the regulator.
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