Dominic Chappell, a former racing driver, bought BHS from previous owner Sir Philip Green last year for just £1.
On Monday, the 88-year-old retailer was placed in administration, putting 11,000 jobs at risk. Since the transaction was agreed, the relationship between the two men has soured.
One source familiar with the 2015 acquisition told City A.M. that BHS collapsed because Chappell “and his merry band of yes men” had over-estimated how much capital could be raised for the business from the company's property portfolio.
Administrators Duff & Phelps noted on Monday that “property sales have not materialised as expected in both number and value”. The source claimed Chappell's expectations were unrealistic.
Another source agreed: "Dominic is saying the business failed because of Philip's failings on pensions, but that's nonsense. The reason the business failed is simply because RAL failed to deliver the funds they said they would through property sales."
The Oxford Street lease was sold for a reported £55m at the start of April, but this was not enough to keep the business going. It requires £70m a year.
Green, who owned BHS between 2000 and 2015, is not without blame in the retailer's fate, sources said. It is understood that last year he rebuffed offers from parties with greater retail experience in favour of Chappell despite the latter having “no experience, no background, no exposure or knowledge of retailing of any kind”.
It emerged yesterday that Chappell, who has twice been bankrupt, took £1.5m out of the firm and moved it into an unconnected business called BHS Sweden, which is not registered at Companies House. After being quizzed on the matter internally the money was returned.
Incredibly, the former racing driver is reported to be preparing an audacious bid to buy the company back out of administration. He told the BBC talks to acquire the business without its 40 loss-making stores were at an “advanced stage” but others have dismissed this as not possible.
The Work and Pensions select committee (WPC), chaired by Frank Field, will ask the Arcadia boss for details on BHS' mammoth £571m pension deficit, while the Business, Innovation and Skills committee is expected to announce its own inquiry into broader work practices.
Chappell may also be called to the BIS committee, according to Sky reports last night.
It follows calls by Labour MP John Mann, among others, for Green to be stripped of his knighthood if he fails to plug up the pensions black hole.
Both Green and the Arcadia press office declined to comment. Chappell could not be reached at the time of publication.