Appearing before the joint House of Commons Business, Innovation and Skills Committee and Work and Pensions Committee, Arcadia Group boss Sir Phillip Green said that Olswang and accounting firm Grant Thornton were still ‘knee-deep’ in the sale of BHS to Retail Acquisitions until just days before the company entered administration earlier this year. Retail Acquisitions owner Dominic Chappell was advised by Olswang when this company acquired BHS from Arcadia last year for just £1 last year. However, as it since emerged that Mr Chappell had been declared bankrupt twice prior to the sale, the role that Olswang played in conducting due diligence for the deal has come under intense scrutiny.

‘What due diligence?’

‘I sought personal comfort from Grant Thornton and Olswang for being well-regarded firms,’ Sir Green told the joint committee yesterday, though conceding that he suspected that Olswang ‘didn’t know [Chappell] from a hole in the wall’ before the deal began. Specifically, Sir Green emphasised that Olswang’s presence in the deal was key to giving him the confidence to move forward with the sale. ‘You turn up with big City advisers, you turn up with a big City law firm – these lawyers took shares in his company. What due diligence did they do on him?’ he said.

Olswang fees

The embattled BHS entered into administration in April, putting 11,000 jobs at risk and leaving behind a gaping £500m hole in its pension scheme. Though Olswang has declined to disclose to the committee investigating the sale of BHS the fees it collected from Retail Acquisitions for advising on the purchase, Sir Green told the committee that the firm had been paid at least £1.2m for its role in the deal. The joint committee inquiry continues. 

Sources: Legal Business; Legal Week