Press Report : Ministers face MG Rover payout fury

Jonathan Walker, Birmingham Post, 7th July, 2009

Former MG Rover workers will have to wait until the end of a fresh inquiry into the fate of the Birmingham carmaker before a long-awaited £16 million compensation fund can be released, Ministers have said. They issued the blunt statement to 6,000 people who lost their jobs when the Longbridge factory closed, as MPs warned there was growing “fury” at yet another delay.

The Government confirmed yesterday that a report into the collapse of Rover, which took four years to complete and cost £16 million, had been referred to the Serious Fraud Office. Ministers said they had no idea how long it would take before the report was published, because the Serious Fraud Office was an independent organisation.

However, the Conservatives claimed the decision was a deliberate attempt to delay publication until after the next election. Ken Clarke, the Shadow Business Secretary, said the Rover staff were “innocent victims” of the Government’s decision, because it meant they were still waiting for money from the £16 million Rover Trust Fund.

The fund was set up by MG Rover chairman John Towers and the Directors of Phoenix Venture Holdings, MG Rover’s parent company, in 2005. It stores cash raised from the Phoenix’s assets, and could lead to payouts of more than £2,600 per worker but the money cannot be released while Phoenix’s management of the business is under investigation.

I am very well aware of the position of those employees and former employees of the MG Rover Group and of the trust fund. I’m afraid that it is quite appropriate for these matters to be referred to the Serious Fraud Office. Until that inquiry and that investigation by the Serious Fraud Office is resolved, I regret that no further steps can be taken with regard to the trust fund.” Ian Lucas MP, Business Minister

That meant former Rover staff had to wait until an inquiry under the Companies Act, ordered by the Government four years ago, was completed. Inspectors finally presented their findings to Lord Mandelson, the Business Secretary, last week but he has referred them to the Serious Fraud Office, which means yet another delay.

Business Minister Ian Lucas insisted the Government could do nothing to speed up the process, as he faced a grilling by MPs. He said: “I am very well aware of the position of those employees and former employees of the MG Rover Group and of the trust fund. I’m afraid that it is quite appropriate for these matters to be referred to the Serious Fraud Office. Until that inquiry and that investigation by the Serious Fraud Office is resolved, I regret that no further steps can be taken with regard to the trust fund.”

However, Mr Lucas faced scathing criticism from Mr Clarke, who said: “Isn’t it obvious, the whole point is to continue to avoid publication, and to avoid answering questions about the Government’s own role in this embarrassing affair.”

Liberal Democrat MP John Hemming (Lib Dem Yardley) said the Phoenix Directors should be asked to donate more money into the trust fund. Labour MP Gisela Stuart (Edgbaston) said: “After four years the most important thing in this affair must be the workers, and I do think they have a right to look to us to resolve this as soon as possible.”

A spokesman for the former MG Rover Directors said: “At no stage during the last four years of the Government inspectors’ investigation has there been any suggestion of fraud.”

[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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