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Former BHS boss took out £1.5m loan from store to pay off mortgage

  • 22/08/2016
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The disgraced former owner of BHS, Dominic Chappell, used a loan from the failing department store to pay off the mortgage on his family home and avoid repossession.

According to a report by the Guardian, legal proceedings brought by Amicus against Chappell were settled when BHS’s parent company, Retail Acquisitions, agreed to pay out £1.5m as an interest-free loan. Chappell has not yet repaid the loan.

The mortgage on Chappell’s family home, where his parents still live, was lent out by Amicus and is thought to have been £1m originally before gradually rising.

Retail Acquisitions, which is 90% owned by Chappell, purchased BHS for £1 from Sir Philip Green in March 2015. Just over a year later, it was announced that the company would be wound down with the last of BHS’s 164 stores due to shut their doors before the end of this month.

Chappell has a history of bankruptcy, a string of failed business ventures under his belt, as well as no previous retail experience. Green’s decision to sell to Chappell has seen him blamed for the loss of 11,000 jobs and a gaping £571m pension deficit at BHS.

The complex loan payment was made to a company called JDM Island Properties, which has just one director and shareholder, the latter of which is an associate of the Chappell’s. JDM went on to purchase the Chappell family home. According to Companies House documents, shares in JDM passed to a Gibraltar-based holding company that acts as the Chappell family’s investment fund.

When questioned by MPs at the time the loan was issued, Chappell said it was being used to remortgage the family home in Dorset.

However, when MPs asked about the loan being used to prevent the property being repossessed, Chappell denied any knowledge of his father’s financial situation, explaining that it had “nothing to do with me”.

Amicus has declined to comment, citing “client confidentiality”.

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