Sir Philip Green’s retail business was warned four months before the sale of BHS that Dominic Chappell, the man who led the buyout, has a history of bankruptcies and lacked experience in the retail industry.
Paul Budge, the finance director of Arcadia, admitted in front of MPs yesterday that the company was aware that Chappell had been declared bankrupt at least once and was “cautious” about the sale, reports the Guardian.
Despite this revelation, Budge defended the decision to sell BHS to Chappell’s consortium, Retail Acquisitions, last year.
“We seriously believed there was a credible business plan and seriously believed he was surrounded by credible people,” he said.
The parliamentary committee into the collapse of BHS continued on Monday with a session exploring the sale of BHS into Retail Acquisitions.
MPs also heard that accountancy firm KPMG had raised concerns about the consortium before it purchased BHS for £1 in March 2015.
David Clarke, a partner at KPMG, told the work and pensions select committee that his firm flagged concerns over the suitability of Retail Acquisitions to run the company and successfully deliver employees’ pensions.
BHS collapsed into administration last month with debts of more than £1.3 billion, including a pension deficit valued at £571m.