Businessman Sir Philip Green (pictured) was wrong to rely on the apparent endorsement of City firm Olswang to justify the sale of retailer BHS to new owners, MPs said today.

Arcadia boss Green was heavily criticised by a report today from the work and pensions select committee for extracting large sums from the business and leaving it on ‘life support’ before the sale to Retail Acquisitions (RAL) in 2015.

Green had told the committee that Olswang, which advised the buyer, had lent the deal and RAL owner Dominic Chappell credibility through its involvement.

MPs said it was ‘disingenuous’ to cite Chappell’s employment of Olswang and accountancy firm Grant Thornton as evidence of credibility as a prospective owner.

The report states both firms were ‘increasingly aware’ of RAL’s weaknesses as purchaser of BHS and were nonetheless ‘content to take generous fees and lend both their names and their reputations to the deal’.

The two advisory firms made around £1.75m in fees from the terms of engagement on the deal.

The committee said both received ‘significantly higher’ fees because the deal went ahead.

In Grant Thornton’s case the fee was four times higher for a successful transaction. Green told MPs that Grant Thornton and Olswang together earned total fees of at least £8m from BHS/RAL, although neither firm was prepared to confirm that figure.

Although it was ‘clear’ from email exchanges that Grant Thornton and Olswang were both preoccupied with how their fees were paid following completion of the transaction, the due diligence exercise was ‘detailed and rigorous’.

The committee concluded: ‘Neither Grant Thornton nor Olswang can be blamed for the decision by RAL to go ahead with the purchase.

‘That said, while Olswang flagged up clearly the weaknesses of BHS as a business and the risks associated with acquisition, Grant Thornton deployed a large team for a short period and, based on the documentation we have seen, produced a report which could have more clearly explained the level of risk associated with the acquisition and offered firmer observations.’

The report found Olswang and Grant Thornton had adopted a ‘very wide interpretation of confidentiality’, sending substitute witnesses to give evidence rather than partners directly involved and not even confirming at a high level the nature of their role in the transaction.

The committee conceded that firms had a duty of confidentiality and to the principle of legal professional privilege, but in exceptional matters of clear public interest this duty was overridden by duties to provide information to parliament.

‘It is a matter of regret that, in spite of our requests, Dominic Chappell chose not to release his advisers from their formal obligations. This denied them the opportunity to explain fully their actions,’ said the committee. 

‘Equally, we regret that Olswang and Grant Thornton sheltered behind these duties when their interests - and that of the public - would have been better served by full and frank disclosure to legitimate parliamentary scrutiny.'

They added: ‘We, and the public, would have had a better understanding of the motives of their client in proceeding with this rushed transaction.’