Mike Ashley has said the administration of Debenhams is a "national scandal" and accused the retailer's financial advisers of "skulduggery" hours after a takeover bid by the Sports Direct tycoon was rejected.
The department store's lenders have seized control of the company, reducing its debts and allowing it to continue trading as normal.
The move wipes out the stake held by Mr Ashley in the business, reportedly worth £150million, and those of all other shareholders.
He had hoped an emergency shareholder meeting would allow him to be appointed the company's board and oust most other directors, but this was cancelled prompting his fiery statement.
It is expected that up to 50 stores will close as part of a Company Voluntary Arrangement (CVA) which is likely to be launched as soon as next week, which will have implications for landlords and 25,000 staff.
What exactly did Ashley say?
Speaking on Tuesday afternoon, Mr Ashley said in a statement to the Stock Exchange: "As normal, politicians and regulators fiddled whilst Rome burnt.
"These politicians and regulators have proven to be as effective as a chocolate teapot.
"I restate my call for the advisers to go to prison given their skulduggery in undermining shareholders and other stakeholders, such as employees and pensioners.
"I call on the authorities to reverse the administration process so that a full, better and appropriate solvent solution can be found."
Earlier on Tuesday, the company's chairman, Terry Duddy, said: "It is disappointing to reach a conclusion that will result in no value for our equity holders.
"However, this transaction will allow Debenhams to continue trading as normal; access the funding we need; and proceed with executing our turnaround plans, whilst deleveraging the group's balance sheet.
"We remain focused on protecting as many stores and jobs as possible, consistent with establishing a sustainable store portfolio in line with our previous guidance."
Sports Direct's Mike Ashley has been keen to take over full ownership of the business. As late as Tuesday morning he renewed his bid to do so, but this further offer was rejected.
Debenhams said in a statement: "The board confirms that it received a revised, highly-conditional, proposal from Sports Direct in the early hours of April 9, which indicated a willingness of Sports Direct to underwrite an equity issue of £200 million.
"The company's lenders have confirmed to the company that the proposal, on the terms set out, was not sufficient to justify an extension to the 8 April deadline."
Mr Ashley's attempts to take control of Debenhams had become increasingly desperate, and over the weekend the businessman demanded the board be investigated, two members to undergo lie detector tests and trading in its shares to be suspended.
Sports Direct added on Tuesday it is continuing to "actively evaluate" a conventional takeover, priced at 5p per share.