Press Report : Four shared £3.5m in payments since failure of MG Rover
Graeme Brown, Birmingham Post, 13th July, 2009
The Phoenix Four have shared a reported £3.5 million in dividends and share payments in the four years since the collapse of MG Rover, it has emerged.
The money came from their investment in MGR Capital, the car giant’s finance and lease loan book, from BMW in 2001, before the car giant’s demise. A spokesman for the four – John Towers, Peter Beale, Nick Stephenson and John Edwards – said the cash was a long-term return on a £2 million investment alongside former MG Rover Chief Executive Kevin Howe.
Meanwhile, The Phoenix Four are set to lock horns with the Government next month in a Freedom of Information tribunal which could see more detail of the car giant’s demise revealed. They want a report written by the Financial Review Reporting Panel in 2005 to be made public, after it was barred from publication by the Government as it carried out its own investigation – which is still yet to be made public.
Publication of the Government’s report was halted last week when Business Secretary Lord Mandelson referred it to the Serious Fraud Office. The four’s spokesman said: “The Directors have been trying to get the details of the report published through the Freedom of Information Act as it may contain something that shows the Government’s role in the collapse.”
They put that money (£2.0m) in and when it was wound up they got the money back. The remaining £1.5 million is the accumulated share in the business since 2001. So that is over nine years and divided between five Directors.” A spokesman for MG Rover Group Limited’s former Directors
The spokesman also said the £3.5 million return from MGR Capital was divided between the five interested parties and the majority was a return on their original investment. He added: “They put that money (£2.0m) in and when it was wound up they got the money back. The remaining £1.5 million is the accumulated share in the business since 2001. So that is over nine years and divided between five Directors.”
The five MG Rover executives bought a share in MGR Capital for £313 million in 2001 in a joint venture with banking group HBOS. According to The Observer, the Phoenix Four’s preference shares in the company have provided a dividend of £100,000 a year and they redeemed a collective £2 million when it was wound up because the loan book had been exhausted.
The newspaper also claims the Serious Fraud Office is weighing up whether to bring criminal charges against the four as investigators look into the use of £1.5 billion cash available to the consortium to run MG Rover and the accounts leading up to the collapse. However, a spokesman for the Phoenix Four, which bought the car giant from BMW for £10, said all accounts had been professionally audited.
[Source: Birmingham Post]
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