The former owner of BHS, Dominic Chappell, was last night (11 January) found guilty of refusing to provide vital documents to the pensions watchdog.
The thrice bankrupt Chappell, 51 bought the high street chain from billionaire Sir Philip Green for just £1 in March 2015.
But just days later The Pension Regulator demanded hundreds of documents in relation to the £571m pension blackhole at BHS.
The 88-year-old company crashed just 13 months later with the loss of around 11,000 jobs and 164 stores.
The regulator, which has a responsibility to safeguard pensions, moved to protect the pensions of 19,000 members.
It agreed a deal with Sir Philip Green that he should pay £363m towards the pension deficit.
The Pensions Regulator charged Chappell with neglecting or refusing to respond to three Section 72 notices demanding he hand over vital documents and information to them relating to the purchase of the company.
In the first ever prosecution of its kind under these charges Chappell was hauled before the courts to answer the allegations.
He was found guilty of all three charges and faces an unlimited fine for failing to comply with the notices.
Michael Levy, defending, told Brighton Magistrates Court that Chappell was a “political scapegoat” for the failure of high street chain.
He claimed Chappell had been “set up to fail” and the case against him was a “sham” and a “show trial”.
The court heard that shortly before Chappell bought the company staff had been seen putting “bin bags” of documents into an “industrial-sized” shredder located in the back of the BHS headquarters in London.
Alex Stein, prosecuting, said the regulator had used a “stick and carrot” approach to try to get Chappell to comply with the notices but their actions were “always reasonable” under parliamentary statute.
He said: “This defendant has refused to provide, to the best of his abilities, responses to the Section 72s.
“When you look at all of the evidence as a whole you get a clear picture of obfuscation on behalf of the defendant.”
After six and a half hours of deliberation District Judge William Ashworth said some of the evidence given by Chappell was “not credible” with some of his explanations “making no sense”.
He said: “All the requests made were valid and reasonable and all the time frames to fulfil these requests were also reasonable”.
The judge said some of the evidence was “incomprehensible” and his excuses fo not providing the information was “unreliable”.
The case is not the end of the line for Chappell as the regulator is still seeking a huge amount of money to help plug BHS pension deficit.
It is understood to be seeking more than £10m from Chappell in relation to the pension deficit.
Chappell of Blandford Forum, Dorset, was adjourned and he will be sentenced at a later date.
Chappell said he would appeal the conviction at a later date.