BHS owner Dominic Chappell took money generated from property sales out of the business, breaching a covenant that he agreed with Arcadia, Sir Philip Green has told a parliamentary select committee.
Green claimed that Chappell took £7m from the sale of BHS offices and £6m from sale of a BHS warehouse.
He alleged that Chappell took £7m from the sale of North West House, NW1, after claiming he had put it into a Bank of China account.
Green said that North West House was sold for £32m, but only £25m showed up in the BHS accounts.
Arcadia was told the remaining £7m had been transferred to a Bank of China account to help set up a £100m loan.
He said that the £7m then arrived at Chappell’s lawyer, Olswang, of which £1.2m was paid to Olswang, £1.2m to accountant Grant Thornton and £1.8m to Chappell himself.
Green claimed that Chappell did this despite the fact that Arcadia made him sign a covenant stating that he would not take cash out of the business.
The select committee was told that Chappell was also meant to put £10m of equity into BHS, but Green said he did not put any money into the business.
“I did not know the sort of costs this guy was running up with advisers. I did not know that his £5m equity was a loan,” Green said.
Read more about the BHS saga >>
Read Green at the BHS inquiry, how it unfolded >>
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