Dominic Chappell, the man who bought BHS for £1 last year and ran it till its collapse in April, originally worked as a driver for the man who first tried to buy the department store, according to new evidence.

Paul Sutton told MPs on Tuesday that he “never thought in a million years” that Chappell would run the chain and had no idea he worked on a separate bid for BHS.

Chappell previously told MPs that he was hired by Sutton to work on his bid for the department store. But Sutton says he had hired Chappell simply to work as his driver during the period. Sutton told MPs he lost £160,000 in a failed property development project on the Isle of Wight ran by Dominic Chappell. Employing him as a driver was the only way he could recoup some of that money, MPs heard.

Sutton, who has a spent conviction — a conviction that no longer legally has to be declared — for fraud in France, was forced to walk away from the deal after a dossier was given to BHS-owner Sir Philip Green highlighting the French charge.

However, once Sutton walked away from the BHS bid, Chappell approached Sir Philip Green’s Arcadia about buying the chain. Sutton says it “baffles me” that Chappell was eventually successful. A twice bankrupt former racing driver, Chappell had no experience of retail.

MPs are investigating the collapse of 88-year-old retailer BHS earlier this year. 11,000 jobs are likely to be lost as a result of the chain going under, and the company’s pension scheme has an estimated £275 million black hole.

Chappell, who has already given evidence to MPs, has admitted to making a profit from his ownership of BHS but insists he did everything he could to turn around the chain, which was already struggling when he bought it.

The parliamentary inquiry into the fiasco is ongoing and MPs will grill top Goldman Sachs bankers in a session on Wednesday. Goldman Sachs gave unofficial advice to Sir Philip Green when he first came into contact with Chappell. Anthony Gutman from the investment bank has already told MPs he pointed out Chappell’s history of bankruptcy to Green and said there were risks involved.

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