The Serious Fraud Office has stepped up its inquiries into the collapse of BHS and the conduct of the department store chain’s former owner Dominic Chappell.
The Guardian understands that the SFO has contacted individuals involved in running BHS before it fell into administration in April, and the administrators themselves, and asked for a series of documents. The SFO is thought to be particularly interested in the dealings of Chappell and his consortium, Retail Acquisitions, during the 13 months it owned the retailer.
The move raises the possibility of the agency launching a formal investigation into the collapse of BHS and Chappell. The SFO always explores whether there is reasonable grounds to suspect that fraud has taken place before publicly announcing it is launching a full investigation.
The demise of BHS led to 11,000 job losses and left a £571m pension deficit. Its failure is already under investigation by the Insolvency Service and the Pensions Regulator, but the SFO’s interest raises the stake considerably because it has the power to bring criminal charges.
Chappell controversially bought BHS for £1 from Sir Philip Green in March 2013. The company collapsed just 13 months later, but Retail Acquisitions received at least £17m from the retailer.
A parliamentary investigation into events at BHS accused Chappell of having “had his fingers in the till” and helping to oversee the “systematic plunder” of the business. The MPs labelled Chappell and the other directors of Retail Acquisitions as “incompetent and self-serving”.
Chappell owes more than £500,000 to the taxman on the profits he made from owning BHS. Chappell has put the business that owes the tax, Swiss Rock Limited, into liquidation, meaning he could walk away without paying the bill.
Swiss Rock is Chappell’s personal business and was paid at least £1.6m by BHS. It owes £365,000 in VAT and £196,306 in corporation tax, according to documents drawn up by Chappell and David Rubin & Partners, the liquidator.
The SFO confirmed that it was reviewing documents relating to BHS but was yet to open a formal investigation.
A SFO spokesperson said: “The SFO confirms it is reviewing material in its possession. If the director considers there are reasonable grounds to suspect serious or complex fraud which meets his criteria, he will open a criminal investigation.”
Chappell declined to comment. He has previously said he “earned” the money paid out from BHS, that his “conscience is very clear” and his team “did the right thing, right the way through”.
Green remains in talks with the pensions regulator about a deal to bail out the BHS pension scheme. The billionaire tycoon, his family and other BHS investors collected more than £580m from the company during the 15 years he ran it.
Green told MPs in June that he would “sort” the pension deficit. However, he is yet to secure an agreement, despite pressure from MPs such as Frank Field, who has said Green should be stripped of his knighthood if he does not pump money into the pension scheme.
Field chaired the parliamentary investigation into BHS alongside Iain Wright. The report concluded that the collapse of the company represented the “unacceptable face of capitalism”.
The last of BHS’s 164 shops closed in August. However, the Middle Eastern group that bought the BHS brand and international business out of administration will relaunch it on Friday as a website. BHS.com will sell a range of lighting and furniture, with plans to eventually sell kitchen and dining products and clothing.
David Anderson, the managing director of BHS International, said the website would sell about 75% of the most popular online items before the original company fell into administration.
He said: “A huge amount of work has gone into rebuilding and launching BHS back into the UK as an online retailer. With a loyal British customer base of well over one million people and the fact that we have secured contracts with so many leading suppliers who are providing products that were among the most popular with our shoppers, we are in the best possible position for launch.”