Friday, September 11, 2009


A report into the collapse of carmaker MG Rover will say that five executives took £42m in pay and pensions from the troubled firm, the BBC has learned.
Independent inspectors said the men behind the takeover and the executive they appointed enriched themselves as Rover headed for insolvency.
Despite the criticism, it does not accuse them of breaking the law.
The long-awaited report into the 2005 collapse of the company is due to be released later.
The independent probe has taken more than four years to complete and has cost the taxpayer about £16m.
The BBC's business editor Robert Peston it was a "humiliating 800-page catalogue of how they enriched themselves while the last UK-owned mass market motor manufacturer hurtled towards insolvency".
The four executives in control of MG Rover, the so-called Phoenix Four, have always denied any wrongdoing.
According to the report by Gervase MacGregor of accountants BDO Stoy Hayward and Guy Newey QC, MG Rover chairman John Towers, ex-vice chairman Nick Stephenson, Peter Beale and John Edwards received around £9m.
Their chief executive, Kevin Howe, is said to have taken £5.7m.


2000: Sold by BMW to the Phoenix Four for £10
2000-2004: Made losses of £611m in the first four years
2004: Started talks with Shanghai Automotive Industry Corporation (SAIC)
2005: SAIC pulled out of a deal to save the whole company and MG Rover goes into administration
2006: MG Rover's assets sold to Nanjing Automobile
2007: Nanjing resumes MG production at the Longbridge plant
2009: Serious Fraud Office investigates circumstances of collapse but says no plans for criminal charges
2009: Long-awaited report, which has cost more than £16m, due to be released

The Serious Fraud Office (SFO) has said it does not intend to launch a criminal investigation into the collapse, which saw about 6,500 people lose their jobs.
The Phoenix Four came in for criticism in the wake of the firm's collapse when it was revealed that they had taken millions in pay and pensions from the company they bought from BMW for a nominal sum in 2000.
They had been "flabbergasted" when business secretary Lord Mandelson referred the matter to the SFO, a spokesman for the group said.

The Conservatives have been calling for the report to be published for some time, suggesting that the government delayed its release because there were criticisms of Labour ministers within it.
The inquiry, carried out by independent inspectors appointed by the Department for Business, Innovation and Skills, is due at 0900 BST on Friday.
Having been quizzed as part of the probe, the Phoenix Four are understood to have seen the report, but have signed secrecy clauses in a bid to prevent public leaks.
The four took control of MG Rover in May 2000 after buying it from previous owner BMW for a nominal £10 - beating off an approach from venture capitalists Alchemy Partners. They also gained an interest-free loan of £427m from the German carmaker.
They were eventually unable to turn around MG Rover's fortunes and it went into administration under insolvency procedures in April 2005, with debts of more than £1bn.
Its assets were subsequently sold in 2006 to China's Nanjing Automobile, which revived the MG sports car brand, but moved most of the production to China.



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