Press Report : Former MG Rover executives stall publication of report
The former bosses of MG Rover, who made an estimated £40m from the business, have stalled the publication of a Government report into their conduct.
The Times has learnt that the inquiry, which was initiated by the former Department of Trade and Industry (DTI), was ready to conclude a few months ago. However, vigorous protests from the four men who ran Rover – who insist that ministers and civil servants shoulder some of the blame for the carmaker’s collapse in 2005 – prompted investigators to conduct a new series of interviews with witnesses.
The independent inquiry, led by Guy Newey, QC, has been going for three years. By the end of October it had cost the taxpayer £13.8m. It is understood that lawyers for the former MG Rover directors have insisted that the DTI, now the Department for Business, Enterprise & Regulatory Reform, did not perform well enough to assist MG Rover as it struggled.
They have also accused officials of disseminating damaging public information. Some members of the communications team at the time have been interviewed recently. The Phoenix Four directors were John Towers, the Chairman, Nick Stephenson, John Edwards and Peter Beale. They took over the company in May 2000, paying a nominal £10 to BMW after the German carmaker decided to break up the Rover Group.
We have seen a number of reports into the collapse of Rover, from the National Audit Office, the auditors, the select committee, which have all been very helpful. But we have been told that this one will be the definitive one, the Rolls-Royce of reports, and we need to see it to fully understand what went wrong at the company
However, the popular local support for their takeover turned into mistrust and anger as the directors quickly became multimillionaires from the business and as they created a labyrinthine corporate structure. It is estimated that they received £42 million among them in pay and pensions. The directors’ pension pot was £17 million while the workers’ pension fund ended up £470 million in deficit.
At one stage the Directors took a £10 million loan note from the business to compensate them for the risk they took when they each put £60,000 of their own money into the business, which was given to them by BMW with a £500m dowry.
Their behaviour prompted the head of BMW in Britain to call them “the unacceptable face of capitalism”. The inquiry does not need the Directors’ approval for the report, but it is understood that its progress is being stalled by legal intervention on their behalf.
Politicians have been pressing for the publication of the report that the Government promised, in May 2005, would be completed as quickly as possible. Richard Burden, Labour MP for Birmingham Northfield, which covers Longbridge, the site of the old Rover factory, has been pressing for publication of the report. He said: “We have seen a number of reports into the collapse of Rover, from the National Audit Office, the auditors, the select committee, which have all been very helpful. But we have been told that this one will be the definitive one, the Rolls-Royce of reports, and we need to see it to fully understand what went wrong at the company.”
Ministers have no power to intervene in an independent inquiry, but Peter Luff, the Conservative Chairman of the Commons Business Select Committee, has called for that system to be changed. MG Rover collapsed with the loss of 6300 jobs in April 2005 after a rescue joint venture deal with Shanghai Automotive Company failed. After that, suppliers, which complained that they had not been paid, stopped delivering goods and the business fell into administration.
[Source: The Times]