"We wasted a lot of money," he said. "It was the worst year for wasting money.
"We didn't get a return on some signings - particularly Emile Mpenza and Nicolas Marin."
He added: "That shouldn't happen in this football club. We've always prided ourselves on being prudent."
He has told Paul Sturrock of his disappointment and has warned the manager that he must do better.
"Following two years of really good positions maybe we'd become a bit complacent in our attitude," he continued.
"It's only when you start to flirt with the spectre of relegation that you realise how serious it would be to find yourselves out of the Championship.
"There were too many lows last year. I've spoken to the manager about this and told him that's not good enough.
"Paul is anxious to sort things out and anxious to do things right."
After seeing Hull and this time Burnley make it to the Premier league the Chairman thinks Argyle could be next. Why not?
"In my view, Plymouth Argyle aren't very far from being a Burnley team," he said. "We aren't very far from being a Hull team.
"There is always one of those who come through the pack in a year and there is no reason why we couldn't emulate one of them - if they can do it, I'm sure we can do it."