The service has written to the Financial Reporting Council (FRC), asking for more information on the conduct of the directors of Taveta Group, Sir Philip Green's retail empire, which will inform its decision.
The news comes in response to a letter from Frank Field, chairman of the Work and Pensions select committee, who called on the service to reopen its investigation into Sir Philip and the other BHS directors in place when the company was sold in 2015.
Mr Field called for the investigation to be reopened after accounting firm PwC, which audited BHS in 2014, was hit was hit with a record £6.5m fine from the FRC in June and the PwC partner who conducted the audit, Steve Denison, also faced a fine of £325,000 and has been barred from audit work for 15 years.
In response to Mr Field's letter Sarah Albon, the chief executive of the Insolvency Service, said: "In the course of our investigation we did indeed consider the question of the preparation and content of the 2014 accounts for Taveta and BHS. We concluded that in relation to those matters there was insufficient evidence of directorial misconduct to justify disqualification proceedings.
"I can confirm that we have written to the FRC in light of their report, requesting they make available to the Insolvency Service any material they hold relating to the conduct of directors of the Taveta Group that we were not previously aware of.
"We will examine what they provide in order to determine whether there is any new evidence that may give us cause to review our decision to conclude the investigation."
The Insolvency Service’s initial investigation resulted in charges being brought against Dominic Chappell, a director of the company that bought BHS for £1, and two of his colleagues.
In June 2016 the FRC launched an official investigation into accounting firm PWC’s audit of BHS for the 2013 to 2014 tax year after a preliminary inquiry found grounds for suspicion of misconduct.
But the FRC’s charges remain unknown as Taveta Investments had sought an injunction against publication of the council's report.
The FRC is still taking legal advice on publication of its full report on the audit.
PwC had initially endorsed the company directors' assessment and signed off BHS as a going concern.
But following the charges the firm accepted "there were serious shortcomings with this audit work".
A spokesperson at the accounting firm said at the time: "We are sorry that our work fell well below the professional standards expected of us and that we demand of ourselves.
"We have agreed this settlement, recognising that it is important to learn the necessary lessons. At its core this is not a failure in our audit methodology, the methodology simply was not followed.
"As a result of our internal reviews we took swift action to enhance our monitoring procedures. We have agreed with the FRC to extend these further for an additional period."
BHS went into administration in April 2016, putting workers' retirement nest eggs at risk and leading to The Pensions Regulator conducting an investigation.
In the end, a £363m settlement was reached with Sir Philip to fund an independent pension scheme for 19,000 former BHS workers.
This gave future pensioners the option of getting the same starting pension as they were originally promised by BHS, and higher benefits than they would have got from the Pension Protection Fund.
carmen.reichman@ft.com
