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Former BHS Owner Dominic Chappell Disqualified As A Director

The Insolvency Service has confirmed that Dominic Chappell has been disqualified as a director for 10 years after their investigations ruled that he had "abused his responsibilities".

Mr Chappell bought BHS for £1 in March 2015 but the Company collapsed in 2016 firstly attempting a CVA, then later entering Administration, before finally ending up in Liquidation. 

The Insolvency Service were investigating Mr Chappell and three other directors. Namely Chappell's father, Joseph, and Colin Sutton who have received disqualification orders for five years each. The final director is still facing proceedings.

Claire Entwistle, the assistant director for the Insolvency Service, said: “Both Dominic and his father abused their responsibilities as directors. Not only did they carry out reckless financial transactions but they failed to maintain adequate company records – a basic requirement for any responsible director.

“The courts have recognised the severity of their actions and the bans handed down will seriously curtail their opportunities to manage companies.”

The High Court heard details of the misconduct including details of a transfer of £1.5m from BHS to a company based in Sweden the day before it was discussed to put the company into Administration. The Insolvency Service had also questioned payments of £6m to companies connected to Mr Chappell and £1.5m paid to him directly. 

Of course, this is not the first involvement the Insolvency Service have had in this case, having investigated Philip Green who was the previous director for 15 years. Following extensive criticism in the press and in parliament, Mr Green paid over £363m to the underfunded pension scheme and escaped without a disqualification order. 

The fall out from this case caused the Government to consider a series of corporate reforms to allow IPs and the Insolvency Service greater powers to investigate and to pursue previous directors and those of dissolved companies (we covered these in CPD Tap 63). We are still waiting to find out when the proposed changes will come in as the Government said "when parliamentary time allows". I guess they are busy sorting out other stuff!?

 

Posted: 08.11.2019
Tags:  announcement
 


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