Retail tycoon Sir Philip Green has partly blamed BHS' massive pension deficit on the global financial crisis of 2008, but admits selling the chain to a serial bankrupt was an "honest mistake".
The news comes as a new review by Green’s lawyers, Lord Pannick QC and Michael Todd QC, reveals that the billionaire did not break any laws when he took around £400 million in dividends from BHS before he infamously sold the chain to Dominic Chappell for £1 in 2015.
Just over a year after the retailer changed hands, it went into administration and a £571 million pension black hole was revealed.
"These dividends were lawful and were paid at a time when the BHS pension schemes were in surplus,” Pannick and Todd’s report read.
“BHS was not sold until 10 years later. The law does not prevent a company from paying dividends because of a risk that the company might become insolvent many years later.
"The main causes of the pension deficit were the increasing longevity of pensioners and the global financial crisis in 2008."
Green said he invested more into BHS than his family took out through dividends, and his lawyers’ review rips into the Work and Pensions and the Business, Innovation and Skills Select Committees for "very serious factual and legal errors".
The review also says the select committees' inquiry process was "so unfair that, if parliamentary privilege did not prevent a legal challenge, a court would 'set aside' the report".
Pannick and Todd’s review also highlights that there was “nothing unlawful or even unusual” about Green and his holding company Taveta Investments’ decision to assist Chappell and his firm Retail Acquisitions in the purchase of BHS.
“The Select Committees' criticism in this regard is bizarre,” the review read.
However, it added that Green’s transaction with Chappell was an "honest mistake".
"The Taveta directors very much regret the terrible impact that the failure of BHS has had on former BHS staff and BHS pensioners and we accept that, with hindsight, it was a mistake to sell BHS to Retail Acquisitions Limited and Dominic Chappell,” the review read.
"But it was an honest mistake and the sale was made in good faith to a buyer who retained a large team of well-known professional advisers, including Olswang and Grant Thornton."
BHS’ collapse attracted nationwide media attention and resulted in the loss of 11,000 jobs.
Around 20,000 pensions also remain in limbo as Green and the Pension Protection Fund continue negotiations about the scheme's future.
Green has been urged by MPs – in particular Work and Pensions Select Committee chairman Frank Field – to fill BHS's pension deficit with his own fortunes.
The tycoon's lawyer’s report re-iterated that "serious and extensive" efforts were being made to find a solution, which they hoped could be “reached in the very near future."
Westminster is set to debate on Thursday whether Green should be stripped of his knighthood.