BHS property deals laid bare at Green hearing

BHS property deals laid bare at Green hearing

18 June 2016 – by Amber Rolt

Retail billionaire Sir Philip Green has branded the BHS CVA a “wasted opportunity”, claiming Dominic Chappell missed £100m of potential property sales.

BHS property deals laid bare at Green hearing

During his six-hour parliamentary hearing on 15 June, Green said former owner Chappell was too slow to arrange a CVA, undermining the chances of turning BHS around.

There were further revelations on convoluted property deals, including the sale of Marylebone House and North West House, NW1, to Chappell. Chappell was quizzed by MPs on the deals when he faced the committee last week.

It was initially intended that BHS’s HQ, Marylebone House, owned by a Lady Tina Green-controlled offshore company, Wilton Equity, was to be sold to Chappell for £35m – under market value so a profit could be made from flipping the property.

Chappell intended to take a £35m loan from the Dellal family in order to pay for the asset and then sell it to a Dellal-controlled company for £43m. But Green changed his mind and it was sold to his own company, Arcadia, for £53m.

Green said all cash made from BHS sale and leasebacks during his tenure was invested back into the business. When BHS completed the sale and leaseback deal for its estate 14 years ago, £152m was generated, he said.

However, Green added that Chappell took money from BHS property sales, breaching a covenant he agreed with Arcadia. Chappell took £7m from the sale of North West House and £6m from the sale of a BHS warehouse after claiming he had put it into a Bank of China account.

Read more about the demise of BHS here.

All the content from this weekís magazine, including this article, is available in the new app.

Green’s resolute defence

Sir Philip Green defended his ownership of BHS and his decision to sell to an ex-bankrupt with no retail experience for £1 at this week’s parliamentary hearing.

He said that after spending 15 years at BHS, he had “a strong emotional tie” to it, and apologised to BHS employees.

The Arcadia boss dismissed concerns over Dominic Chappell’s history, instead blaming advisers involved in the sale, which included Goldman Sachs, Olswang and Grant Thornton.

He pledged to “resolve” the £571m pension deficit, but did not answer any questions on how the deficit came about.

Green speaks out

On the sale to Chappell: “Would I do that deal again? No. Am I sorry we did that deal? Yes.”

On Goldman Sachs:“One million percent we would not have done business with [Chappell] if they would have said, ‘Don’t deal with this guy.’ That would have been the end of it. That was not the advice we got.”

On the pension deficit: “Somebody, whether it was the trustees or wherever, somebody was asleep at the wheel… You can’t tell me I’m accountable.”

On the press: “I could be a murderer, the way they write about me.”

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BHS property deals laid bare at Green hearing

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