Chappell knew BHS chain was bust when he bought it – claim

EX-BHS boss Dominic Chappell knew the chain was insolvent when he bought it from Sir Philip Green, the pensions watchdog is claiming.

Mr Chappell bought BHS for £1 in 2015, just over a year before it went into administration with the loss of 11,000 jobs.

Fresh questions about the acquisition have emerged after the Financial Reporting Council said BHS could have been insolvent when it was sold, and fined PwC £10m for its discredited audit of the company ahead of the deal.

The Pensions Regulator now argues Mr Chappell knew the company was bust at the point of sale, as part of its bid to seize £9.5m from him for the BHS pension fund, sources told the Press Association.

The regulator claims that, because of this, he should have funded the acquisition fees himself, rather than taking the cash out of BHS after the acquisition.

It is understood that the regulator’s contribution notice relates to around £8m in professional fees to firms such as Grant Thornton and Olswang, and £1.5m that Mr Chappell extracted himself.

Mr Chappell is challenging the regulator, saying he was unaware of the true state of finances at BHS.

PA understands Grant Thornton and Olswang were not given access to group accounts when they performed due diligence on the BHS sale and relied largely on information certified by PwC.