Insolvency Service pursues Chappell over BHS collapse probe

(c) Sky News 2017: <a href="">Insolvency Service pursues Chappell over BHS collapse probe</a>

The Government department which investigates bankrupt companies is taking legal action against a former owner of BHS as part of its probe into the retailer's collapse.

Sky News has learnt that the Insolvency Service is pursuing Dominic Chappell, the businessman who bought BHS from Sir Philip Green for £1 in 2015, for failing to provide information relevant to its inquiry.

Sources said a court hearing had been scheduled for 27 April in Manchester at which the Insolvency Service would seek to secure an order compelling Mr Chappell to co-operate.

The nature of the information being requested was unclear.

It is the latest in a lengthening line of legal challenges facing Mr Chappell, a former bankrupt whose efforts to revive BHS ended with it plunging into administration almost a year ago.

The chain's former owner is being pursued by The Pensions Regulator, which in February secured a £362m settlement with Sir Philip.

The pensions watchdog is reported to be seeking £17m from Mr Chappell, who also faces a legal fight to prevent Retail Acquisitions Limited, his business vehicle, from being wound up by administrators.

In a statement issued to Sky News, a spokesman for the Insolvency Service said it "has powers, on behalf of the Secretary of State, to apply to court to enforce co-operation with its investigations".

The spokesman said it "would not be appropriate to comment on ongoing investigations or litigation", and declined to speak about the court hearing scheduled for later this month.

The Insolvency Service, which sits within the Department for Business, Energy and Industrial Strategy, can seek the disqualification of individuals as company directors, although it is unclear whether it intends to pursue Mr Chappell or others connected to BHS on that basis.

Neither Mr Chappell nor his spokesman could be reached for comment on Thursday, although the latter was quoted last month as saying that the former BHS owner was "working very hard with the liquidator to recover and preserve nearly £50m, which will benefit the creditors and BHS pensioners".

A source close to Mr Chappell said his documents relating to BHS had been seized by Her Majesty's Revenue and Customs last November, meaning he was unable to answer many of the Insolvency Service's "very detailed questions".

Some of the documents have since been returned to Mr Chappell, the source said, and he was willing to hand over the information that the Insolvency Service was seeking.

Mr Chappell has acknowledged receiving more than £4m from BHS during 13 months as the company's owner.

In February, the Insolvency Service's boss said its BHS inquiry had completed its initial phase.

"Should our investigation find grounds for disqualification action against former directors we will be in a position to commence proceedings significantly earlier than April 2019," Sarah Albon wrote in a letter to Frank Field, the Labour chair of the Work and Pensions select committee.

BHS's demise last year was the largest on Britain's high streets since Woolworths disappeared in 2008, with approximately 11,000 jobs lost.