Press Report : MP Burden says axed Rover staff should share HBOS millions
Alun Thorne, Birmingham Post, 1st September, 2009
A Birmingham MP has called for former Rover workers to be given a share of £22 million left over from the winding-up a car-leasing company linked to the failed Longbridge firm.
MGR Capital – the manufacturer’s finance and lease loan book – was acquired from BMW by the so-called Phoenix Four along with former Rover Chief Executive Kevin Howe in a joint venture with HBOS in 2001 in a deal separate to the main car manufacturing operation.
The company was finally wound up last August when the loan book was exhausted and the remaining cash – boosted by a £16 million VAT refund in 2005 – was expected to be distributed to the remaining shareholders.
However, it has been revealed that all the remaining funds have been handed to HBOS, which is now run by the state-controlled Lloyds Banking Group, and Richard Burden, whose Northfield constituency covers the former car plant, said there was a good argument for some of the money finding its way back to the 6,000 workers who lost their jobs when the manufacturer went bust.
He said: “The Government has a stake in HBOS and, while I am not suggesting that it begins to micro-manage the banks, it is important to remember where this money came from. These profits came from the Rover operation, from the workers and from the dealers and I am asking whether it is reasonable that all the money should be swallowed into the corporate profits of HBOS.”
The Government has a stake in HBOS and, while I am not suggesting that it begins to micro-manage the banks, it is important to remember where this money came from. These profits came from the Rover operation, from the workers and from the dealers and I am asking whether it is reasonable that all the money should be swallowed into the corporate profits of HBOS.” Richard Burden MP, Birmingham Northfield
Mr Burden said there were a number of areas where some of the money could be spent that would benefit the former workers and the wider Longbridge community. He added: “I think a contribution towards the workers themselves would be reasonable. The money could also be ringfenced and re-invested into the Longbridge site or used to support the local automotive sector.”
Mr Burden said he would now be taking the issue up with the Government in an attempt to persuade HBOS to make a contribution to the workers who are still waiting for potential four-figure pay-outs from a trust fund that was established with the proceeds from the sale of Rover assets including Studley Castle.
The fund has been in limbo until the publication of the official DTI report into the activities of John Towers, Peter Beale, Nick Stephenson and John Edwards who have been accused of taking millions out of the car maker before it collapsed in 2005 but this is now due to be released on September 11.
The publication of the report – which is expected to be highly critical of the Government – was delayed earlier this year due to a Serious Fraud Office investigation into the collapse but it has since stated that no charges would be brought against anybody at the company.
Nobody from HBOS was available to comment last night.
[Source: Birmingham Post]