SIR PHILIP GREEN'S Arcadia group was informed that the man he planned to sell BHS to had a history of bankruptcy and had no retail experience, MPs have been told.
Anthony Gutman of Goldman Sachs, who gave "informal" advice to Arcadia, also told a committee of MPs that proposals tabled by a consortium headed by Dominic Chappell to acquire BHS were "lacking in detail".
Mr Gutman said that Goldman Sachs was not paid for what he described as "informal observations" to Arcadia, adding that he informed the group's finance director Paul Budge verbally in December 2014 of his findings, four months before BHS was sold to twice bankrupt Mr Chappell.
READ MORE: Sir Philip Green urged to appear before MPs over BHS collapse
Sir Philip sold BHS for £1 to Retail Acquisitions, headed by Mr Chappell, in March 2015. The department store chain went bust last month, leaving a £571 million pension fund black hole and putting 11,000 jobs at risk.
Both men, who will be grilled by MPs of the Business and Pensions select committees, have come under fire - Sir Philip for paying a £400 million dividend to his family from the business and over his management of the pension scheme, and Mr Chappell for sucking management fees out of BHS prior to its collapse.
Mr Gutman added that Goldman Sachs did not advise on the deal in a formal capacity because it was too small.
READ MORE: Former BHS employee demands Sir Philip Green pays for staff pensions
The MPs were questioning advisers from Goldman Sachs, Nabarro, Deloitte, KPMG, PwC, Eversheds and Linklaters in order to ascertain "who knew what when and what checks were put in place before the sale to Retail Acquisitions".
Arcadia executives were also grilled by MPs, and Mr Budge admitted he was aware of one of Mr Chappell's bankruptcies and was "cautious" in selling BHS to him because of it.
READ MORE: Former BHS employee demands Sir Philip Green pays for staff pensions
But he defended the sale, saying: "In the four weeks before the deal, some of the heaviest due diligence I've seen was carried out."
He added that Arcadia understood there would be £120 million of funding from Farallon Capital that would be injected into the retailer.
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