Author: By Holly Williams, Press Association
Business Secretary Lord Mandelson said in a written statement to Parliament
that the SFO had been called on to “consider whether there should be a
criminal investigation” following the recent long-awaited results of the
The Birmingham-based firm collapsed in 2005, which led to the loss of 6,000
jobs at the car maker and many more at affected suppliers and dealers.
The Department for Business, Innovation and Skills said the publication of the
independent inspectors’ report into MG Rover would be delayed further “to
ensure any potential prosecution is not prejudiced”.
The inquiry cost the taxpayer £16 million and was only delivered on 11 June
after four years.
The Government launched an investigation immediately after Rover’s collapse to
examine what went wrong between Phoenix Ventures acquisition of the firm in
2000 and administrators being brought in.
There has been mounting anger over the cost of the investigation, with
repeated calls made for it to be made public.
Lord Mandelson said its position on the report’s publication would be reviewed
following the outcome of the SFO’s probe.
The four executives in charge of MG Rover – the so-called Phoenix Four – were
reported yesterday to have taken out an estimated £40 million from MG Rover
in the five years they were in charge.
But their spokesman today said they received closer to £30 million in the
The four – former Rover chairman John Towers, Peter Beale, John Edwards and
Nick Stephenson – bought the company from BMW for £10 in 2000.
The Phoenix Four have accused the Government of using the launch of an SFO
inquiry to kick the issue into the “long grass”.
“There has never been any suggestion of improper conduct by the directors and
this was confirmed in a report by the administrators PricewaterhouseCoopers
six months after they took over the running of the company,” said a
spokesman for the former Rover directors.
He added: “Their pay and remuneration has been open and transparent for years
– there’s no secret and there never has been.”
The inquiry was set up under the Companies Act by then trade and industry
secretary Alan Johnson.
Mr Johnson said at the time that an investigation covering the years leading
up to the collapse was in the public interest.
Lord Mandelson said today that the inspectors in charge of the inquiry –
barrister Guy Newey QC and accountant Gervase McGregor of BDO Stoy Hayward –
had “wide powers to require documents and the attendance of witnesses,
including directors, officers and agents of the company”.
“They investigated the affairs of MG Rover, its parent company Phoenix Venture
Holdings and MGR Capital Limited and 32 related companies between the
purchase of MG Rover from BMW in May 2000 and the date of it entering
administration,” he added.
MG Rover Group went into administration on 8 April, 2005, owing creditors
nearly £1.3 billion and leaving employees at the Longbridge plant without a
job, while also affecting an estimated 12,500 in subsidiary firms.
The MP for Birmingham Northfield, Richard Burden, whose constituency includes
almost all of the former MG Rover site, said yesterday that “people in the
West Midlands still need to be told the facts about what led to the closure
of the company”.
“They have now waited over four years for those answers and they know that £16
million of public money has been spent on the Companies Act Inquiry.
“It will be a bitter blow for everyone to face the prospect of further delays
before they have answers to their questions.”
He also expressed concern about the delay in payments from a trust fund set up
to help ex-employees in the event of the firm’s collapse, which have been
pending publication of the Rover report.
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