Dominic Chappell, the former BHS owner, has been banned from holding any company directorships for the next 10 years by the Insolvency Service.

The man who purchased BHS for £1 from Sir Philip Green a year before it collapsed with the loss of 11,000 jobs, has been banned from being involved in the “promotion, formation or management of a company” for the next decade by the High Court.

The court found Chappell “wrongfully diverted £1.5m of funds from BHS Limited to a company based in Sweden” the day after the possibility of an administrator being appointed to the business had been discussed with its board.

Chappell also transferred “in excess of £1m to Retail Acquisitions Limited”, a company he was the director and 90% shareholder of at the time. The court said those funds should have been retained by BHS and its property arms “as proceeds from property sales in London’s Oxford Street and Sunderland”.

While director of Retail Acquisitions, Chappell was found to have “failed to maintain, preserve or deliver adequate accounts records” to the Insolvency Service, which led to investigators being unable to verify the shares Chappell’s company bought in a Portuguese property company.

The inadequate records kept by Chappell meant investigators were “unable to explain or verify the circumstances under which” he caused Retail Acquisitions to borrow £500,000 without the knowledge of his co-directors.

Chappell bought a US company with £275,000 of the Retail Acquisitions loan, with the remaining £221,960 balance used to pay a company where Joseph Chappell, his father, was “a de facto director”.

Joseph Chappell has been banned from holding any business directorships for five years.

The court also found Dominic Chappell failed to comply with obligations requiring BHS’ pensions liabilities at the time it collapsed. 

Assistant director for the Insolvency Service Claire Entwistle 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.”