Former owner of collapsed BHS Dominic Chappell and one of his business partners are under investigation by the Serious Fraud Office (SFO).

The agency is understood to be looking into financial dealings between Chappell and Paul Sutton in the run-up to Retail Acquisitions’ £1 purchase of the department store chain from Sir Philip Green in March last year.

Sutton was involved in talks with Green about the purchase of BHS but was reportedly forced to stand aside after the Arcadia owner was warned of his reputation. The three-time bankrupt Chappell stepped in to revive the deal in late 2014.

Sutton, a convicted fraudster, oversaw B52 Investments – a suspected Ponzi scheme that sold share certificates. Chappell sat on the board of B52 subsidiary Containasuite in early 2014.

A source close to the SFO told The Sunday Times that its intelligence section was trying to establish whether there were grounds to open a criminal investigation into BHS, which collapsed into administration earlier this year.

The shutters came down on the few remaining BHS stores last month, leaving 11,000 jobs and 20,000 pensions at risk.

Earlier this month, it was reported that two Retail Acquisitions board members who advised Chappell prior his purchase of BHS are to face questioning by The Insolvency Service as part of its continued investigation into the retailer’s demise.

Stephen Bourne and Mark Tasker stood down on the day that Retail Acquisitions’ purchase of BHS completed, and were paid £387,500 respectively for their role in the acquisition.