Goldman Sachs warned Arcadia about BHS buyer, MPs told

Philip Green's Arcadia Group was warned about the potential risks of selling High Street chain BHS to Dominic Chappell, a combined committee of MPs heard on Monday.

Antony Gutman of Goldman Sachs said he flagged up Chappell's previous bankruptcies and lack of experience in the retail sector, the BBC reported. He also told MPs he was acting in an unpaid informal capacity for Green.

The joint session of the Business and Work and Pensions committee was looking at the part played by advisers before Green sold BHS to Chappell's Retail Acquisitions for £1 in 2015.

The chain went into administration in April with a pension fund deficit of £571m. More than 10,000 employees face an uncertain future as the search for a buyer continues.

Gutman, who is co-head of Goldman Sachs' European investment banking services, said he gave his "observations" to Paul Budge, Arcadia's finance director, four months before the sale, the report stated.

He added that Chappell was not acting along and had gathered experienced advisers around him to work on the deal.

Budge and other Arcadia executives defended the decision to sell BHS to Retail Acquisitions, despite the company collapsing into administration just 13 months after the deal.

“We seriously believed there was a credible business plan and seriously believed he was surrounded by credible people,” the Guardian quoted Budge as saying.

Arcadia left £94.5m of cash and debt facilities in BHS for Chappell, Budge added, as well as providing £110m of guarantees on loans and leaving £200m of property in the retailer, the newspaper added.

Advisers to Retail Acquisitions will appear before the committee on Tuesday.