Press Report : Former MGR Directors face demands to pay trust money

Jonathan Walker, Birmingham Post, 7th April, 2010

Former MG Rover Directors are facing renewed demands for the payment of a long-awaited Trust Fund to support their former workers, on the fifth anniversary of the Birmingham car-manufacturer’s closure. MP Richard Burden (Lab Northfield) has written to John Towers, the firm’s ex-Chairman, asking the so-called Phoenix Four to hand over millions of pounds.

MG Rover stopped trading on 8th April 2005. The hammer-blow to Birmingham’s economy coincided with the last General Election and led former Prime Minister Tony Blair and Gordon Brown, then the Chancellor, to rush to Birmingham with a pledge to support Rover staff.

As far as your former employees are concerned, the company told them it would look after them in the event of MGR going under – but, five years on, they still haven’t seen a penny from the Trust Fund… You could instead make a start by transferring into the Trust Fund the millions of pounds which members of the Phoenix consortium are expected to receive from the wind-up of MGR Capital.” Richard Burden MP in a letter to John Towers, former Chairman of MG Rover Group Limited.

Mr Towers and fellow Directors Nick Stephenson, John Edwards and Peter Beale promised to donate assets from their business Phoenix Venture Holdings – which owned MG Rover – to a Trust Fund for former employees.

However, the cash has still not been paid out five years on. According to the Directors, they were barred from making an immediate transfer of funds by the prospect of a formal Government inquiry, but this was completed last year. A spokesman for the Phoenix Four said they still did not have access to the funds because the business was in the process of being liquidated.

In his letter to Mr Towers, Mr Burden said he believed money could be made available from MGR Capital, a separate business owned by the four Directors and former MG Rover Chief Executive Kevin Howe as a joint venture with bank HBOS. It bought Rover’s loan book from BMW in 2001.

A detailed report published in September by Government Inspectors found that the Directors stand to receive £3.2 million each from MGR Capital while Mr Howe stands to receive £1.4 million.

Mr Burden said in his letter: “As far as your former employees are concerned, the company told them it would look after them in the event of MGR going under – but, five years on, they still haven’t seen a penny from the Trust Fund.”

He added: “As the fifth anniversary of the closure approaches, I am writing to you to ask you to end the delay. If you are precluded from transferring assets from former Phoenix companies – at least for the time being – then so be it.

The Directors remain wholly committed to doing their very best to release money for the Trust Fund. That has been their position from the start and all interested parties, including MPs, has been kept informed of progress.” A Spokesman for the Phoenix Four

“You could instead make a start by transferring into the Trust Fund the millions of pounds which members of the Phoenix consortium are expected to receive from the wind-up of MGR Capital.”

A spokesman for the Phoenix Four said: “The Directors remain wholly committed to doing their very best to release money for the Trust Fund. That has been their position from the start and all interested parties, including MPs, has been kept informed of progress.”

[Source: Birmingham Post]

Clive Goldthorp

Clive Goldthorp

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.
Clive Goldthorp
Posted in: AROnline News, MG Rover
Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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