MG Rover report: Govt seeks Phoenix Four ban
MG Rover report: Govt seeks Phoenix Four ban
Friday 11th September 2009
The government is to begin legal proceedings against executives who oversaw the collapse of MG Rover to prevent them from holding similar positions again.Business secretary Lord Mandelson today published the long-awaited report into the demise of MG Rover Group (MGRG) in 2005.
He said that lawyers were compiling evidence to begin proceedings against the directors of MGRG parent company Phoenix Venture Holdings to ban them from holding directorships in the future.
Peter Beale, John Edward, Nick Stephenson and John Towers - known as the Phoenix Four - took up to £40 million in pay and pensions - as the group collapsed with debts of £1.3 billion and 6,000 job losses.
Inspectors concluded that the Phoenix Four, who were initially heralded as saviours after buying Rover for £10 and incorporating the MG brand in 2000, were in it for their own "personal gain", as well as being "out of their depth".
In a statement published simultaneously with the 897-page report appearing on the Department for Business, Innovation and Skills website, the four men said they were the victims of a "witch-hunt".
They also accused the official report of being a "whitewash" designed to absolve ministers of any blame.
In the report, the former directors are also accused of providing "inaccurate and misleading" explanations to MPs before the business and enterprise select committee.
Lord Mandelson said: "This has been a painstaking enquiry by independent inspectors. It was important to get all the facts into the open so that workers who lost their jobs and creditors who were not paid know the truth.
"Action is being taken. Based on this report, work has been commissioned to start legal proceedings to seek to declare relevant directors unfit to hold office and to disqualify them from management of any company in future."
Lord Mandelson received the report earlier this summer, but it was not published until the Serious Fraud Office was asked if there was a prospect of criminal convictions.
A month ago to the day the SFO said there was not, paving the way for the report to be published today.
MGRG had been in talks with Shanghai Automotive Industry Corporation when it went under, allowing another Chinese automaker - Nanjing Automobile - to buy its assets post-administration.
Nanjing Automobile subsequently resumed production at the Longbridge plant.
With today's publication, former workers are finally able to receive funds from that sale.
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