Arcadia paid £2m to staff in BHS' head office to keep them from leaving as the business collapsed into administration.
In a statement, ex-BHS Darren Topp said nearly 100 people resigned in four weeks from the end of March 2016, and the money from Arcadia was used to "stem the tide of resignations".
Funds were called in from Arcadia to retain key people so the business could continue to trade; the employees were told the money would be paid when the business was sold or shut down.
When it became clear we were entering administration, keeping head office employees was critical to our ability to sell the business whole and indeed run the business short term.
This is evidenced by the discussions we had with potential purchasers all of whom wanted to keep the head office structure in tact.
The measures were taken months after 100 head office staff were cut at the beginning of the year in an attempt to keep BHS afloat.
When the company voluntary agreement was announced in March - a sign of distress - there was a spate of resignations.
Sir Philip Green's controversial sale of BHS has now prompted The Pensions Regulator (TPR) to demand more powers.
Green sold BHS for £1 to serial bankrupt Dominic Chappell and the sale is now being investigated to find out whether Green was trying to dump his obligation to the pension scheme.
TPR wants to be able to intervene in corporate transactions when a scheme is underfunded.