Press Report : Phoenix Four remain defiant following Directorship bans

Alun Thorne, Birmingham Post, 8 May 2011

Phoenix Four

Phoenix Four

The Phoenix Four remained defiant after the Government announced that the former MG Rover owners had agreed to be disqualified as Directors for between three and six years.

The move against Peter Beale, John Towers, Nick Stephenson and John Edwards follows a long-running investigation into their involvement in the Longbridge-based former car giant, which went out of business in 2005.

However, the men reiterated their belief that they had done nothing that warranted the action. A spokesman said: ‘As they have already made it clear that they have no intention of holding company office in the UK, they have agreed to a voluntary compromise, while emphatically not accepting any allegations or suggestions of wrong-doing.

‘The former Directors point out that they have done nothing which justifies disqualification. All of the many inquiries into the collapse of MG Rover have achieved little other than a series of massive bills.’

As they have already made it clear that they have no intention of holding company office in the UK, they have agreed to a voluntary compromise, while emphatically not accepting any allegations or suggestions of wrong-doing. The former Directors point out that they have done nothing which justifies disqualification. All of the many inquiries into the collapse of MG Rover have achieved little other than a series of massive bills.” A spokesman for the Phoenix Four

The men came under attack in an 800-page official report two years ago, which claimed that MPs investigating why the firm folded were given ‘inaccurate and misleading information’ by one of the four Directors.

The move by the Government comes just weeks after production started up again at the former Longbridge site which has been taken on by Chinese company SAIC Motor where it has begun assembling the MG6. At the time the Phoenix Four claimed that it could have continued production at the site if it hadn’t been for “political chicanery”.

The four bought MG Rover from BMW for a nominal £10 in 2000 and paid themselves millions of pounds before the firm went bust with the loss of more than 6,000 jobs.

A statement by the Business Department said the four had each undertaken not to act in the management of limited companies for varying periods of between three and six years.

‘The disqualification undertakings conclude the enforcement action by The Insolvency Service on behalf of the Government.

‘Since the publication of the independent report into the financial affairs of MG Rover and its associated companies, the Insolvency Service has been taking forward intended proceedings to disqualify the Directors. In line with the findings of the independent report, it was the position of the Insolvency Service that taken as a whole, the overall conduct of the Phoenix Four made them unfit to be Company Directors.

‘The service particularly highlighted the report’s findings in respect of the way the Directors manipulated the assets and income streams through the use of companies in which they, rather than the creditors of MG Rover, had an interest, allowing them to benefit through large salaries, dividends and profits,’ said a statement.

These disqualification undertakings represent a successful conclusion to a lengthy and complex investigation into the collapse of MG Rover. Peter Beale, John Towers, Nick Stephenson and John Edwards have each been banned from being involved in the management of any company for several years. The outcome of this case serves as an important reminder that unacceptable conduct by Company Directors can result in lengthy periods of disqualification.” Edward Davey MP, Minister for Employment Relations, Consumer and Postal Affairs, Department for Business, Innovation and Skills

Edward Davey, the Minister with responsibility for corporate governance and company law, said: ‘These disqualification undertakings represent a successful conclusion to a lengthy and complex investigation into the collapse of MG Rover.

‘Peter Beale, John Towers, Nick Stephenson and John Edwards have each been banned from being involved in the management of any company for several years. The outcome of this case serves as an important reminder that unacceptable conduct by Company Directors can result in lengthy periods of disqualification.’

Peter Beale has been disqualified from acting in the management of companies for six years, John Towers and Nick Stephenson have each been disqualified for five years and John Edwards for three years. The disqualification undertakings come into effect on 17 May 2011.

MG Rover Group, the manufacturer of Rover and MG cars, went into administration on 8 April 2005 owing creditors nearly £1.3 billion. The then Labour Government appointed inspectors to investigate the affairs of the carmaker (MGRG), its parent company Phoenix Venture Holdings Limited and MGR Capital Limited, between the purchase of MGRG from BMW in May 2000 and the date of it entering administration.

[Source: Birmingham Post]

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.

1 Comment on "Press Report : Phoenix Four remain defiant following Directorship bans"

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  1. Hilton Davis says:

    I can’t vouch for the credibility of the “Phoenix Four”, but I have to agree that all the Government Inquiries and debate has cost the taxpayer too much money – money which could have been usefully deployed elsewhere.

    I also recall that the remaining assets of MG Rover were sold to NAC for £49m(?). Considering that today a single Premiership footballer can change teams for fees of £35m plus, it seems to me that MG Rover was a good buy for NAC/SAIC…

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