Press Report : Former MG Rover bosses make £3m payment to creditors
Alun Thorne, Birmingham Post, 27th November, 2009
The company owned by the former bosses of MG Rover has paid £3 million to creditors of the firm. The so-called Phoenix Four have agreed to pay the sum to a liquidator almost five years after the collapse of Longbridge.
The money will be distributed by Price Waterhouse Coopers among about 5,000 creditors who include former factory workers. It is understood the Phoenix Venture Holdings agreed to pay the money after an investigation by Government Inspectors. The Longbridge-based firm folded in 2005, with the loss of 6,000 jobs.
The Phoenix Four – John Towers, Nick Stephenson, John Edwards and Peter Beale – transferred MG Rover assets to Phoenix Venture Holdings (PVH) while they were in charge of the company. They paid themselves £42 million in salary and pensions. A report published in September following the firm’s collapse revealed a number of transactions that Liquidators and Inspectors had been investigating. The latest monthly accounts published by the liquidator show a £3 million payment direct from PVH.
Phoenix Four spokesman Ian Strachan said today that the money had come from MG Rover and would not affect the amount available to the Employees’ Trust Fund when PVH was wound up next year. A statement from PVH said: “All inter-company transfers were approved by the company’s accountants and professional advisers and were part of normal business.”
The statement also confirmed that “negotiations with Liquidators regarding the transfers” had taken place and that “an agreement has been reached which will further benefit creditors of MG Rover”.
All the assets from the Phoenix Group will transfer in to the Employees’ Trust Fund. This figure will in no way detract from that. There is a lot of ongoing work to maximise the assets of Phoenix Venture Holdings.” Ian Stachan, a spokesman for the Phoenix Four
Mr Strachan said: “All the assets from the Phoenix Group will transfer in to the Employees’ Trust Fund. This figure will in no way detract from that. There is a lot of ongoing work to maximise the assets of Phoenix Venture Holdings.” He added that PVH was likely to be wound up “in months”, releasing a figure “in the millions” for the Trust Fund.
It was revealed earlier this month that the liquidation of a third firm, MGR Capital, was likely to net to the four Directors a share of an £11 million windfall. No decision has been made on whether any of the money will used to bolster the fund for former staff.
The long-awaited report into the collapse of the UK’s last major car firm said its bosses had given themselves “unreasonably large” pay-outs. However, the executives described the report, which cost £16 million, as a “witch-hunt” and a “whitewash for the Government”. The Serious Fraud Office previously said it did not intend to begin a criminal investigation into the collapse of MG Rover.
[Source: Birmingham Post]