Sir Philip Green has questioned Olswang's due diligence into Dominic Chappell, the owner of Retail Acquisitions Limited (RAL), which bought retailer BHS from Green's Arcadia Group, in evidence to MPs today.

Appearing before the Business, Innovation and Skills (BIS) Committee and the Work and Pensions Select Committee earlier today, Green criticised Olswang's work on the sale of BHS to RAL, for £1 last year.

Olswang was appointed to advise RAL on the acquisition, while Linklaters advised Arcadia.

Following the sale of BHS and its collapse into administration it emerged that Chappell had previously been declared bankrupt.

Green told the committee he suspected: "They [Olswang] didn't know the guy from a hole in the wall."

He said: "David Roberts [corporate partner] of Olswang was knee deep in this transaction from day one to day 301 'til four days before this company went into administration."

He repeatedly stated that Olswang along with Grant Thornton, lead financial advisers on the deal, had given him "comfort" regarding Chappell's business credentials.

Green told the committees: "For me, these people gave him [Chappell] the credibility to move forward."

Discussing Chappell he said: "You turn up with big City advisers, you turn up with a big City law firm – these lawyers took shares in his company. What due diligence did they do on him?"

Solicitors Mark Tasker and Eddie Parladorio were board members of Retail Acquisitions at the time of its purchase of BHS. Tasker is head of corporate and commercial at City law firm Bates Wells Braithwaite while Parladorio was previously a defamation partner at London media law firm Schillings.

Last week Olswang declined to answer the committees' questions on the fees it received for its work on the deal, citing client privilege.

Today Green said that Olswang was paid at least £1.2m for its work on the deal.

Green also accused Olswang of holding £7m from the sale of one of BHS's properties in its client account in a "blatant breach of the covenants" of the sale of BHS.

He said the covenants of the sale had guaranteed that proceeds from the sale of some of its properties would be used to fund BHS but that instead £7m from one of the sales had been divided between Olswang, which took £1.2m; Grant Thornton; Chappell and others.

Green said that, at the time, he had been told this money was being used to secure banking facilities and that he only found out when the business entered administration that it had not been used for this.

BHS collapsed into administration on 25 April, putting 11,000 jobs at risk and leaving a £500m hole in its pension scheme. With the administrators unable to find a buyer, the company was put into liquidation in May.

Olswang was unavailable for comment.