Dominic Chappell rejected cash backers for BHS acquisition

Dominic Chappell rejected offers of additional funding before buying debt-laden BHS for £1 and taking it into administration just a year later, the Evening Standard has learned.

Cornhill Capital was hired by the thrice-bankrupt businessman to source investors to be joint-venture partners to buy the under-pressure high street chain from Sir Philip Green’s Arcadia Group.

The City broker, a small outfit with links to wealthy private investors, is understood to have found a number of potentially viable offers of investment into the Chappell’s vehicle.

These included possible buyers for some of BHS’s stores, but the bids were rejected by the former racing driver.

Last month, BHS collapsed into administration. Administrators were today combing through bids attempting to find a buyer for the whole chain and its 11,000 employees. However, concerns are growing over how long the process is taking.

Chappell hired Cornhill through Swiss Rock plc, one of his investment vehicles. But he completed the deal for BHS through Swiss Rock Ventures, later renamed Retail Acquisitions, with its other advisers Grant Thornton and Olswang. It is understood Cornhill was not paid.

Cornhill, a little-known broker to tiny AIM companies, usually in oil and gas or mining, is reportedly considering suing Chappell for up to £1 million.

Its chief executive Andrew Frangos, who will be questioned by MPs tomorrow, declined to comment.

One small-cap broker said Cornhill’s involvement in BHS “appears very odd” and said that it only usually advises “sexy oil and gas names”.

Its work for Chappell, who declined to comment, was thought to have been a project through private equity links.

Cornhill was in charge of last year’s farcical share issue for New World Oil & Gas. A small-cap investor known as “Chris Oil” accidentally bought half of the AIM-listed oil firm in the name of his mother, a pensioner who runs a B&B in the Malverns.