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FORMER BHS boss Dominic Chappell knew the retail chain was insolvent when he bought it from disgraced tycoon Philip Green, the pensions watchdog claimed today.
Three-time bankrupt Mr Chappell bought BHS for just £1 in 2015. Just over a year later it crashed into administration, costing 11,000 jobs and leaving a £571 million pension deficit.
Fresh questions about the deal have emerged after the Financial Reporting Council said BHS could have been insolvent when it was sold.
The Pensions Regulator is now arguing 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.
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 paid in fees to firms such as Grant Thornton and Olswang, and £1.5m Mr Chappell extracted himself.
Mr Chappell is challenging the regulator, saying he was unaware of the true state of finances at BHS.
The Pensions Regulator has dropped all action against Mr Green after he contributed £363m to the BHS pension fund black hole. The Insolvency Service has also stopped short of seeking to ban him from acting as a company director.
Mr Chappell, however, is subject to disqualification proceedings and is also appealing against a conviction for failing to provide officials with information on the BHS pension scheme, which will be heard at Hove Crown Court tomorrow.