Press Report : Inquiry into MG Rover collapse still rolling on

Nick Huber, Accountancy Age, 27th November, 2008

Three and a half years after the government announced an inquiry into MG Rover, there is still no final report. It is estimated to have cost more than £12m, including tens of thousands of pounds on food and drink expenses and around £100,000 spent on hotels. But, three and a half years after the government announced an inquiry into the collapse of UK car giant MG Rover, a final report is still not thought to be imminent.

The inquiry, which was set up by the former Department of Trade and Industry, is being led by Gervase MacGregor, forensic accounting partner at BDO Stoy Hayward, the top ten accounting firm and Guy Newey QC of Maitland Chambers. The collapse of the car maker in 2005, with the loss of more than 6,000 jobs, has also raised accounting issues. The Accountancy Investigation and Discipline Board, is investigating the conduct of Rover’s auditor and adviser, Deloitte.

Last week the inquiry took a fresh twist after a newspaper reported that former bosses at the car giant had stalled publication of the government report into their conduct. The Times said the investigation was ready to conclude a few months ago. However, the four men who ran Rover for five years before it collapsed, ­ John Towers, the chairman of Phoenix Venture Holdings and directors Nick Stephenson, John Edwards and Peter Beale, ­ argued government ministers and civil servants should shoulder some of the blame and had persuaded investigators to question more witnesses, the newspaper reported.

A spokesman for the Phoenix Four denied the directors had recently lobbied the Rover inquiry to delay its report and interview new witnesses within the Department for Business, Enterprise & Regulatory Reform ­ formerly the DTI ­ but admitted it had raised this point a couple of years ago. He added: ‘One assumes the report will be published sometime in the middle of next year. [MG Rover] only lasted about five years and the further the report is from the event the less relevant it becomes.’

BDO declined to comment. A spokeswoman for The Insolvency Service, which is part of the Department for Business, said: ‘The independent inquiry into Rover is ongoing and The Insolvency Service does not comment on live investigations or speculate on when the inquiry will conclude. The inspectors are working to conclude their inspection as quickly as possible, subject to the need to be thorough and fair.’

The AIDB, part of the Financial Reporting Council, began its audit of Rover’s 2003 accounts and provision of other services in 2005, at the request of the then Secretary of State for Trade and Industry, Patricia Hewitt. When the AIDB investigation was announced Deloitte said it was disappointed but confident of the result of the probe.

[Source: Accountancy Age]

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.

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