The Analysis News & Opinions


Opinion


Figures show shake-up in brokers’ criteria searches


Our new figures show a shake-up in the most common criteria searches performed by brokers in October. Changes were seen in the residential, equity release, and buy-to-let categories. In the equity-release sector the new,


most common, search was for ‘additional borrowing’ followed in second place with ‘ad-hoc payments on additional borrowing’. This suggests a heightened desire for borrowers to be able to unlock more funds whilst keen to maintain control over repayments. The desire for people to unlock the equity


in their homes continues to be strong but feedback supporting these statistics suggests that borrowers are looking far more closely at not only how much they can raise but how easily they can manage the monies raised by their homes. This is further supported by the fact that


the fourth and fifth most popular searches were related to whether interest payments were allowed. This suggests that even at this pre-application stage borrowers are asking brokers to search for a lender who will let them make lower monthly repayments. Within residential searches brokers have,


for the first time, been searching for lenders who will only leave a ‘soft footprint at the decision in principle stage’. With ‘defaults registered in the past three years’ being a fellow top five search last month, this clearly suggests that brokers are searching more often and more widely to place clients with past credit problems and do not want the search process itself to lower the success of an application.


Nicola Firth Chief executive, Knowledge Bank


Former BHS director banned for 10 years


The court has handed down a disqualification order to former BHS director, Dominic Chappell, while also banning his father, Joseph Chappell. Dominic Joseph Andrew Chappell (52),


from Bryanston, Blandford Forum, has received a 10-year disqualification. His father, Joseph Edward Chappell (81), formerly of Longridge, Wheatleys Eyot, Sunbury, Middlesex and now residing at Bryanston, has been banned for five years. During the hearing the court heard that,


while a director of BHS Limited, Dominic Chappell wrongfully diverted £1.5m of funds from BHS Limited to a company based in Sweden. The transaction took place one day after the potential appointment of an administrator for BHS Limited had been discussed by the board of directors. Dominic Chappell also transferred funds


in excess of £1m to Retail Acquisitions Limited, a company he was also a director of and 90% shareholder at the time. The funds should have been retained by BHS and BHS Properties as proceeds from property sales in London’s Oxford Street and Sunderland respectively. The court also heard that during the time


he was the sole director of Retail Acquisitions, Dominic Chappell failed to maintain, preserve, or deliver up adequate accounting records to the Insolvency Service. As a result, investigators have been unable


verify the receipt of shares by Retail Acquisitions in a Portuguese property firm. Investigators believed the purchase of the


shares were achieved through a series of transactions where £1.5m, which had been borrowed from BHS Group Limited, was then lent to two companies, JDM Island Properties Limited and Wheatleys Bridge


Limited, which owned a property occupied by Joseph Chappell. The security held against that property was then exchanged for shares in the Portuguese company. Investigators were also unable to establish


the circumstances behind a £2m payment from BHS to Retail Acquisitions, as well as payments in excess of £1m made by Retail Acquisitions directly to Dominic Chappell. The inadequate records also meant that


investigators were unable to explain or verify the circumstances under which Dominic Chappell caused Retail Acquisitions to borrow £500,000 without the knowledge of his then co-directors. In total, £275,000 of the loan funds was


used by Retail Acquisitions to buy an American company, while £221,960 of the remaining balance was paid to a company that Joseph Chappell was a de facto director of before being paid on to Dominic Chappell or for his benefit. The American company never traded but


was later sold for $201,000, with the proceeds being paid into Dominic Chappell’s personal bank account. The court also found that Dominic


Chappell had failed to comply with statutory obligations requiring him to provide data relating to the BHS Pension Schemes. Claire Entwistle, assistant director for the


Insolvency Service, said: “Both Dominic and his father abused their responsibilities as directors. Not only did they carry out reckless financial transactions but they failed to maintain adequate company records – a basic requirement for any responsible director. “The courts have recognised the severity


of their actions and the bans handed down will seriously curtail their opportunities to manage companies.”


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www.CCRMagazine.com


December 2019


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