Philip Green told the businessman who bought BHS that “as a billionaire and knight of the realm”, he would resolve the retailer’s pension deficit, a London court has been told.
On Wednesday, Dominic Chappell, who acquired BHS from Sir Philip for £1 in 2015 and is now on trial for tax evasion, told Southwark Crown Court that the Monaco-based retail tycoon had assured him he would resolve BHS’s pension problem and stand behind trade credit insurance after the business was sold.
“He gave me his word in a very strong way in front of 20-odd professionals including from Olswang [a law firm] and Grant Thornton [accountants],” Mr Chappell told the jury.
Mr Chappell denies three charges of tax evasion, which cover the period that he was running BHS. He testified that as he negotiated the acquisition, Sir Philip “refused point blank” to let him access BHS pension documents.
Mr Chappell also told the court that at a meeting before the deal closed, Sir Philip gave his “absolute assurance” that he would stand behind trade credit insurance for BHS. But when he was pressed further to document this, Mr Chappell said, Sir Philip told the meeting that “the deal’s off — you are not taking my word” and “stormed out of the room”.
After the BHS deal completed, Mr Chappell said he was forced to “back off” from negotiations with a Portuguese towel supplier following “a typical Philip Green conversation” with “lots of shouting, lots of swearing and lots of intimidatory tactics”.
Mr Chappell said Sir Philip “disliked the Pensions Regulator immensely” and the pension hole remained unresolved before BHS collapsed in 2016.
He told the court that the Monaco-based tycoon could be “fine” when he met him one to one, but when meeting with groups of professionals, Sir Philip had a “strange way of singling out the weakest person in the bunch and making them feel uncomfortable”.
In 2015, two weeks after Mr Chappell bought BHS, the court heard that the retailer’s “pension problem exploded” when the regulator launched a probe.
When BHS collapsed, its pension scheme had a £571m financial hole. Sir Philip agreed with the regulator in 2017 to pay £363m into the scheme and Mr Chappell has been ordered to pay £9.54m.
Mr Chappell is accused of evading paying tax on £2.2m of income he received from the acquisition of BHS and using it to fund his lifestyle including buying a Bentley car, a holiday in the Bahamas, a yacht called Maverick and some expensive Beretta guns.
He denies three counts of cheating the public revenue between January 2014 and September 2016. The trial continues.