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Jon Griffin, Birmingham Post, 8th July, 2009

Phoenix Four claim Gordon Brown vetoed £120m loan for MGR

Tony Blair wanted to save Longbridge with a £120 million Government loan but was thwarted at the eleventh hour by then Chancellor Gordon Brown, claim the Phoenix Four. The allegation that Brown “pulled the plug” on the Birmingham car firm in spring 2005 is one of a series of criticisms levelled at the Government and the Department of Trade and Industry in the MG Rover Dossier.

The Dossier, issued by PR advisers Media House International, points the finger of blame for the closure of Longbridge, with the loss of more than 6,000 jobs, directly at Gordon Brown. The document says: “The Directors firmly believe one vital fact – Prime Minister Tony Blair wanted to save MG Rover. It was then Chancellor Gordon Brown who pulled the plug on advice from his special adviser Shriti (now Baroness) Vadera.”

It continues: “Having made the offer of a £120 million bridging loan, subject to PVH [Phoenix Venture Holdings] Directors’ agreed contribution of £10 million, the offer was suddenly and mysteriously withdrawn. MG Rover closed in April 2005. Four years later the workforce and the public deserve to be given the full reasons for its demise.

“Various Government departments have refused all requests for information and are treating FOI with contempt. The inquiry has cost the taxpayer more than £16 million. PVH provided five years of high quality jobs for 6,000 people, not to mention between 20,000 and 30,000 supply chain jobs. Unlike the recent banking bail-outs, the Phoenix Directors pledged substantial personal sums in support of the offered and then withdrawn short-term Government loan.

“The DTI not only failed to support MG Rover but they poured millions into rival foreign manufacturers such as Ford, Nissan, BMW, Vauxhall and Peugeot. The DTI’s dealing with China was amateurish at best and malicious at worst. The Nanjing Automobile Corporation was appalled by the behaviour of the DTI under the then Secretary of State, Alan Johnson.”

The dying days of the company were painful and the negotiations tortuous and the dealings with the Labour Government were characterised by leaks, lies, disinformation and double dealing. Since then the Directors suffered a torrent of media abuse fuelled by the No.10 spin machine and designed to distance the closure of MG Rover as far away as possible from the door of Brown and Vadera.” The Phoenix Four’s PR Advisers, Media House International

The report says former Longbridge workers “still deserve to be given the full story behind the closure of the last independent volume car maker in Britain. All they have is an unfathomable referral to the Serious Fraud Office and yet more delay and obfuscation. The Department for Business, Enterprise and Regulatory Reform (BERR) gave several reasons as to why the inquiry into the closure took such an interminable time.

“These reasons included: ‘the inquiry is extremely detailed and needs proper time to draw the right conclusions’ or ‘the Directors are having their legal advisors hamper the progress.’ Neither of these reasons were justifiable or true and the Directors said so for some considerable time.

“The inquiry was led by Mr Gervase McGregor of accountants BDO Stoy Hayward and barrister Guy Newey, QC. The total cost attributable to the inspectors is over £16 million. However, this figure is only the tip of the iceberg. In fact the collapse of MG Rover has cost the British taxpayer hundreds of millions. Certainly the taxpayer could have avoided a further £150 million if the original joint venture with SAIC was still in place at Longbridge.

“It is not too difficult to quantify the above losses to the taxpayer. However what remains a major difficulty is why the 6,000 former MG Rover employees have been kept in the dark over the final days of their company. The four Directors of Phoenix Venture Holdings – John Towers, Nick Stephenson, Peter Beale and John Edwards – are in a not dissimilar position and still have no idea of what they are supposed to be accused.

“The dying days of the company were painful and the negotiations tortuous and the dealings with the Labour Government were characterised by leaks, lies, disinformation and double dealing. Since then the Directors suffered a torrent of media abuse fuelled by the No.10 spin machine and designed to distance the closure of MG Rover as far away as possible from the door of Brown and Vadera.”

The report says that, following MG Rover’s collapse, then Trade and Industry Secretary Patricia Hewitt asked the regulatory Financial Reporting Council (FRC) to conduct a review of the accounts of MG Rover and its associated companies for the past five years. “The FRC report has never been made public after being suppressed by the Government. Lawyers acting for Phoenix Venture Holdings and Media House associates submitted more than 30 separate questions to various Government departments under the Freedom of Information Act.

“However, all requests for information that could shed light on Government thinking and decision-making during the crucial period before the £120 million short-term loan to save the company was suddenly abandoned have been denied. Yet none of the information requested could be judged to be commercially sensitive since MG Rover is now extinct.”

It is clear that, since the demise of MG Rover, there was a concerted campaign to lay the blame at the door of the Directors of Phoenix Venture Holdings. Despite Gordon Brown and Shriti Vadera’s lack of conviction about the ultimate Joint Venture process that the £120 million loan was meant to facilitate, the essential elements of that JV have now been put in place, independently by the now merged Nanjing and SAIC, but at an enormous and unnecessary cost in terms of jobs and taxpayers’ money.” The Phoenix Four’s PR Advisers, Media House International

The report claims the Phoenix Consortium saved MG Rover from closure “at the eleventh hour. When the deal was signed, BMW’s liquidation team from Munich was already on the Lufthansa flight heading for Birmingham. In its five-year tenure the Consortium invested £1.3 billion in the company, raised from negotiated sources.

“Phoenix significantly reduced the huge losses being made by the company under BMW ownership. Losses in excess of £700 million under BMW stewardship were reduced to below £100 million under Phoenix. In its negotiations with SAIC/Nanjing, Phoenix negotiated a value for the company of £400 million.

“Phoenix was in the process of developing electric hybrid versions of the Rover 25, the Rover 75 and the MG TF. When the Government precipitated MG Rover’s collapse, this vital technology, and the opportunity for a lead on electric vehicles, was lost to the UK.”

The report concludes: “It is clear that, since the demise of MG Rover, there was a concerted campaign to lay the blame at the door of the Directors of Phoenix Venture Holdings. Despite Gordon Brown and Shriti Vadera’s lack of conviction about the ultimate Joint Venture process that the £120 million loan was meant to facilitate, the essential elements of that JV have now been put in place, independently by the now merged Nanjing and SAIC, but at an enormous and unnecessary cost in terms of jobs and taxpayers’ money.

“The conclusion that we have reached is that the Government is doing and will do anything to disguise the role played by senior political figures in the closure of MG Rover. And, as in the recent revelations over MPs’ expenses, it is clear that adherence to Freedom of Information means nothing to this Government.”

[Source: Birmingham Post]

MG Rover Gervase MacGregor, Gordon Brown, Guy Newey QC, John Edwards, John Towers, Nick Stephenson, Peter Beale, Phoenix Four, Phoenix Venture Holdings Limited, PVH

Jonathan Walker, Birmingham Post, 8th July, 2009

The results of a four-year inquiry into the collapse of MG Rover could be published before the end of the month, Business Secretary Lord Mandelson has revealed. He said a team of four fraud officers was currently examining the long-awaited findings, and they might be published within 20 days.

Lord Mandelson admitted he was disappointed it had taken so long to complete an investigation into the failure of the Birmingham car maker, which closed its Longbridge factory in 2005 with the loss of 6,000 jobs. However, he insisted he had done nothing to delay the publication of the report, and had simply followed the advice of the Government’s lawyers.

Lord Mandelson was accused of kicking the report “into the long grass” when he confirmed earlier this week that he had received the findings of an official inquiry, but would not be publishing them immediately. Instead, he referred the report to the Serious Fraud Office. The report would remain confidential until police had examined it, to avoid prejudicing any potential future prosecutions, he said. The decision was condemned by Conservatives, who claimed the Government was trying to cover up the circumstances which led up to the demise of Rover until after the next General Election.

Lord Mandelson had the chance to defend himself when he gave evidence to the Commons Business Committee. He said: “I don’t think we will have to wait that long to publish its report in its entirety. Judging by the indication given by the Director of the Serious Fraud Office, who has already set up a team of four people to examine the report, I understand it normally takes about 20 days to carry out this examination. It can take longer in complex cases.”

I don’t think we will have to wait that long to publish its report in its entirety. Judging by the indication given by the Director of the Serious Fraud Office, who has already set up a team of four people to examine the report, I understand it normally takes about 20 days to carry out this examination. It can take longer in complex cases.” Lord Mandelson, Business Secretary

Robert Alderman, the Director of the Serious Fraud Office, had stressed that officers would examine the report “fairly and scrupulously”, Lord Mandelson said. “We will let him and his team do that job, and then it will be possible to publish it,” he added. He revealed that he decided to publish the report once he received it last month, but was told to wait by Government lawyers. “Obviously we cannot prejudice any future prosecution and, therefore, I will be guided by the Serious Fraud Office, but I would hope it will be possible to publish the report as fast as possible,” he said.

Business Minister Pat McFadden (Wolverhampton South East) rejected claims the Government was responsible for the delay in distributing cash from a reported £16 million trust fund which was set up to benefit former Rover staff. Former Directors of Phoenix Venture Holdings said they were setting up the fund using money raised from Phoenix assets but it cannot be distributed while those assets are under investigation. Mr McFadden said: “It is not the department that have coupled the trust issue. It’s not us that have issued rules and guidance on that. It’s not a decision for the department, so it’s not our decision as to what happens to those funds.”

Meanwhile, campaigner Gemma Cartwright, Chairwoman of the Rover Community Action Trust, criticised politicians who used Rover as “a political football”. The campaigner, whose husband Andrew worked for MG Rover, said: “The report should not be rushed. The investigation should follow the correct procedures so that the workers know why they lost their jobs.”

[Source: Birmingham Post]

MG Rover Lord Mandelson, Rover Community Action Trust, Serious Fraud Office, SFO