Press Report : Phoenix Four slated for MGR collapse
Jon Griffin, Birmingham Post, 11th September, 2009
Lord Mandelson today started moves to ban the Phoenix Four as Directors after a Government report claimed the Longbridge bosses ran MG Rover for “personal gain”.
The Business Secretary was expected to move swiftly to launch Director Disqualification Proceedings after the long-awaited report attacked the four men’s conduct at the helm at Longbridge. The Inspectors concluded that John Towers, Nick Stephenson, Peter Beale and John Edwards were out for “personal gain” and were “out of their depth.”
However, the Phoenix Four hit back fiercely, accusing the Government of “utterly offensive” claims and “a complete travesty of the truth”. They said: “The indications are that they will pursue disqualification proceedings against us, despite the fact that it is very well known that there is no possibility of us ever again considering this sort of role in the UK. It is political grandstanding”.
Lord Mandelson has asked the Treasury Solicitor to “consider the underlying documents and to compile the evidence that would be needed to commence director disqualification proceedings.”
The report, compiled at a cost of over £16 million over a four-year period, was highly critical of the Phoenix Four, who bought Rover from BMW for a nominal £10 in May 2000 at a time when Longbridge was running up annual losses of £700 million.
The four men were paid average salaries and pension benefits of over £1 million a year each throughout their five-year reign at Longbridge, despite losses at the car firm of tens of millions of pounds.
MG Rover finally closed in April 2005 with debts of more than £1.3 billion, throwing more than 6,000 people out of work.
The report, which does not directly recommend directorship bans, is said to claim that the Phoenix Four would have taken even more money out of the company if they could. The findings largely clear the Government, ministers and civil servants of any wrongdoing.
The publication of the report follows the announcement by Lord Mandelson a month ago that the Serious Fraud Office would not be holding a full investigation into the Phoenix Four’s role at Longbridge.
The delay to publication of the report has left £16 million languishing in a MG Rover Employee Trust Fund account, blocking payment of four-figure sums for former workers raised from the collapsed car firm’s assets.
[Source: Birmingham Post]