A businessman who failed to pay a fine of more than pound;1 million has been appointed lead sponsor of a new academy, raising serious concerns over the Government's selection process.
David Hughes, who has been named as the main backer of Birkenhead Boys' Academy in the Wirral, was involved in a price-fixing scandal when he ran the Allsports chain of sport shops.
Mr Hughes's company was fined pound;1.35 million in 2003 by the Office of Fair Trading for participating in a cartel that agreed to sell replica football shirts at set prices.
Following an appeal by the company, the fine was increased to pound;1.42 million because of Mr Hughes's failure to co-operate with the original investigation. He was criticised for blacking out sections of his diary.
Allsports did not pay the fine and two years later the company went into administration. Mr Hughes, a multimillionaire, also ran a property business, which went into administration earlier this year.
The entrepreneur was named lead sponsor for one of two new academies planned for Birkenhead last month.
But his background has raised concerns over whether he is an appropriate person to back a school. It has also led to calls for the process of choosing sponsors to be overhauled.
John Dunford, general secretary of the Association of School and College Leaders, said the system lagged behind the transparency demanded in other parts of the public sector.
"There has always been a question about the way sponsors are selected to run academies," he said. "It has never been an open process of the sort now commonplace in all other public sector contracts.
"Given that the Government does not follow these procedures it should be particularly careful when selecting academy sponsors to ensure that they provide good role models for young people.
"It must make sure that business sponsors have the utmost propriety in their own business background."
Who can be an academy sponsor?
Christine Blower, general secretary of the NUT, said: "There does not seem to be any robust set of criteria which defines who may or may not be a sponsor. Someone who has an unpaid fine of more than pound;1 million does not seem to be the kind of role model we want in front of our young people."
But Mr Hughes, who grew up on a council estate near the site of the proposed academy, said his business success could be an inspiration to pupils.
"I'm a classic example of a boy who did well," he said. "There are not many stories as good as mine. Now that I'm 60, I want to put something back.
"I have extraordinary qualities to bring to the process that I'm prepared to give on a voluntary basis: no reward, no knighthood, just to help the kids in Birkenhead. The key line is that your life script is not written at birth."
Mr Hughes insisted that the OFT case had been a miscarriage of justice. The fine had not been paid because appeals were ongoing, he said.
A spokesman for the Department for Children, Schools and Families said: "David Hughes has a deep personal interest in Birkenhead and a drive to support the young people of that area where he grew up.
"He has always been open about his business background and worked very closely with us as we carried out due diligence checks which found no reason for him not to be an academy sponsor."
Schools for scandal
The debate over David Hughes follows criticism of David Ross, co-founder of Carphone Warehouse and sponsor of Havelock Academy in Grimsby.
Mr Ross became embroiled in a scandal over his financial dealings last year for breaking City rules when securing loans.
He resigned as Olympics adviser to Boris Johnson and as chairman of transport group National Express, but remains sponsor of the academy.