Dominic Joseph Andrew Chappell (52), from Bryanston, Blandford Forum, Dorset, has received a 10-year disqualification. His father, Joseph Edward Chappell (81), formerly of Longridge, Wheatleys Eyot, Sunbury, Middlesex and now residing at Bryanston, has been banned for 5 years.
During those periods, father and son cannot be involved, directly or indirectly, in the promotion, formation or management of a company without the permission of the court.
During the hearing the court heard that, while a director of BHS Limited, Dominic Chappell wrongfully diverted £1.5 million of funds from BHS Limited to a company based in Sweden. The transaction took place one day after the potential appointment of an administrator for BHS Limited had been discussed by the board of directors.
Dominic Chappell also transferred funds in excess of £1 million to Retail Acquisitions Limited, a company he was also a director of and 90% shareholder at the time. The funds should have been retained by BHS and BHS Properties as proceeds from property sales in London’s Oxford Street and Sunderland respectively.
The court also heard that during the time he was the sole director of Retail Acquisitions, Dominic Chappell failed to maintain, preserve or deliver up adequate accounting records to the Insolvency Service.
As a result, investigators have been unable verify the receipt of shares by Retail Acquisitions in a Portuguese property company.
Investigators believed the purchase of the shares were achieved through a series of transactions where £1.5 million, which had been borrowed from BHS Group Limited, was then lent to two companies, JDM Island Properties Limited and Wheatleys Bridge Limited, which owned a property occupied by Joseph Chappell. The security held against that property was then exchanged for shares in the Portuguese company.
Investigators were also unable to establish the circumstances behind a £2 million payment from BHS to Retail Acquisitions, as well as payments in excess of £1 million made by Retail Acquisitions directly to Dominic Chappell.
The inadequate records also meant that investigators were unable to explain or verify the circumstances under which Dominic Chappell caused Retail Acquisitions to borrow £500,000 without the knowledge of his then co-directors.
£275,000 of the loan funds was used by Retail Acquisitions to buy an American company, while £221,960 of the remaining balance was paid to a company that Joseph Chappell was a de facto director of before being paid on to Dominic Chappell or for his benefit.
The American company never traded but was later sold for $201,000, with the proceeds being paid into Dominic Chappell’s personal bank account.
The court also found that Dominic Chappell had failed to comply with statutory obligations requiring him to provide information relating to the BHS Pension Schemes.
Dominic Chappell appeared at the High Court on Monday 14 October 2019 before Deputy ICC Judge Shaffer seeking an adjournment of the hearing but was unsuccessful. Joseph Chappell did not attend.
Joseph Chappell was disqualified for his role as director of Swiss Rock and three other companies, Capital Management Limited, Newport Management Limited and Base Technolgy.
These three companies were involved in a number of financial transactions involving the distribution of funds, including to Dominic Chappell. These transactions remain unexplained due to Joseph Chappell’s failure to maintain, preserve or deliver up adequate accounting records.
A third director, Colin Richard Sutton, had previously been disqualified for 5 years in April 2018 for failing to ensure that Capital Management filed accounts and failing to maintain, preserve or deliver up adequate accounting records.
Colin Sutton also allowed Capital Management to be used as a proxy for Retail Acquisitions and Swiss Rock but Capital Management’s records were inadequate to explain those dealings, including payments for vehicle and marine goods and services, as well as £205,000 paid to Dominic Chappell.
Claire Entwistle, 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.
Notes to editors
Persons subject to a disqualification order are bound by a range of restrictions.
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- November 5, 2019 at 2:45 pm by Editor (displayed above)
- November 5, 2019 at 2:45 pm by Editor