Chappell took an early “hardship” salary and treated BHS’ money as his own, says former BHS chief executive Darren Topp
Former BHS chief executive Darren Topp accused Dominic Chappell of treating BHS' money as his own, taking his salary early as a "hardship payment", evidence released by MPs today shows.
In a letter to MPs on 21 June, Topp lists occasions when Chappell tried to take the company's money, saying that three-time bankrupt Chappell tried to buy family holiday flights from the company budget.
Read more: Sir Philip Green is looking to save 1,000 staff in BHS concessions
Topp said the transactions were prevented, "much to the annoyance of Chappell".
In December 2015, Chappell also took a "hardship payment" salary before his family Christmas vacation to the Bahamas, "despite RAL having taken out millions of pounds since the acquisition", Topp wrote.
Chappell demanded a loan of £90,000 from the BHS treasury to pay his personal tax bill at the beginning of this year – BHS had to hire its own lawyers to defend itself.
Read more: BHS: Expect questions over the pension scheme and Lady Green
"This was at a time when cash resources were limited and needed to pay both suppliers and employees' payroll," Topp told MPs. "Following legal advice BHS insisted on the return of that money which was duly returned within ten days."
Topp said "the business was ripe for a turnaround", but it failed because "sadly, RAL took money out of the business, not put money in".
MPs heading up the joint select committee inquiry into the demise of BHS now want Chappell to explain the funds he took out of BHS, and why he was given a bonus.
"BHS failed because of RAL's failure to invest or attract investment and provide a credible basis for the continued support of the supply base and associated extension of trade credit, whilst taking £17m out of the business," Topp said.
"Matters were made worse by the lack of a speedy solution to the pension benefit."
Payments to Retail Acquisitions' staff
The MPs will now be focussing on Retail Acquisitions' staff, who Topp described as “so called experts” who “were paid considerable sums of money”. The nine staff Topp listed earned a joint £2.6m between March 2015 and February 2016.
Retail Acquisitions' directors Stephen Bourne and Mark Tasker, who resigned the day BHS was sold, earned £400,000 each, as revealed by separate documents from Retail Acquisitions' advisers Olswang to The Pensions Regulator.
Eddie Parladorio, who resigned his directorship on 24 May 2016, took home £460,000.
“The connection of these individuals to Chappell denoted a clear nepotistic environment at the very top of the business influencer pool,” said Topp.
He continued: “There was a distinct ‘us’ and ‘them’ culture during the RAL ownership which Dominic Chappell encouraged.”