Dominic Chappell was forced out of a previous business venture after taking around €400,000 (£315,000) from the company for his personal use. Chappell’s consortium owned BHS before it collapsed last month.

The money was transferred from a start-up company in Spain called Olivia Petroleum, which Chappell fronted and used to bolster his City credentials when he acquired BHS. The money also appears to have been moved without the permission of other shareholders and has never been repaid.

As well as being spent at a series of luxury restaurants, hotels and shopping trips, plus a chandlery business that fits out yachts, it is understood that the funds were then diverted into other accounts including one belonging to Chappell’s wife.

Further questions about the due diligence conducted by the billionaire Sir Philip Green would be raised by the allegation about Olivia Petroleum’s finances. Sir Philip Green is under mounting pressure to explain his actions as he sold BHS to Chappell’s consortium Retail Acquisitions for one pound last year.

BHS collapsed into administration leaving 11,000 jobs at risk and the company pension fund in deficit to the tune of £571m just 13 months after the sale. Chappell fronted Olivia Petroleum between 2009 and 2012 in which he held a 40% stake. Private investors, who are understood to have ousted him from the firm in 2012 by diluting Chappell’s shareholding own remainder of the company. Internal documents show that the move followed the discovery of the missing funds.

“There is an awful amount of money spent in travel, restaurants, shopping and UK, which indicates that this could be considered as hidden salaries of payment in species to employees. Big liability here. The company is not trading and this is not in accordance with that,” stated one email, sent by a lawyer acting for Olivia Petroleum in November 2011.

“In our due diligence we discovered fraud and malfeasance in the Spanish company,” another internal email, sent by a different source said.

Before adding that the monies he received from Olivia Petroleum amounted to “under €200,000, Chappell told the Guardian that the notion that large amounts of money were taken from the company for his personal use was “totally untrue”.

“That was my salary. That’s what I drew from the company,” he said. However later on he changed his story and said he had not drawn a salary but had taken “a directors’ loan” amounting to “€212,000, I think”.

“I still own a significant amount of it [Olivia Petroleum]”, he also said before saying he had sold his stake.

While the project as never completed, Olivia Petroleum was set up to acquire and develop an oil storage facility called Istamelsa in Cadiz, on Spain’s south-western coast. As it has yet to settle outstanding tax affairs Istamelsa remains in administration.

(Source:www.theguardian.com)