MG report to point finger at bosses

The long-awaited report into the demise of MG Rover is to reveal the large sums pocketed from the failed company by its management

FIRST POSTED SEPTEMBER 11, 2009

The much-anticipated investigation into the bankruptcy of UK car firm MG Rover in 2005 is to be released later today and is set to reveal the scale of the failure. The report is 850 pages long and took over four years to compile at a cost of £16.3m. The most controversial aspect of the affair is likely to be the scale of the pay and pensions earned by the 'Phoenix Four', comprising chairman John Towers, Nick Stephenson, Peter Beale and John Edwards who made about £9m each. Chief executive Kevin Howe made £5.7m.

Despite the size of the payouts by the firm which went bankrupt with the loss of 6,000 jobs, the Serious Fraud Office is not planning to launch a criminal investigation into the affair. The MG bosses bought the firm from BMW in May 2000, buying it for £10 and gaining a £427m interest-free loan at the same time. However five years later the carmaker colapsed with debts of over £1bn.

The workers' trust fund has, as yet, paid out no money to redundant workers

Business secretary Lord Mandelson is expected to start a civil action against the management team, however, with the aim of disqualifying them from being company directors.

Other points of controversy include the workers' trust fund, which has, as yet, paid out no money to redundant workers and the government's role in the collapse, in particular the £6.5m loan MG received during the 2005 election campaign.

WHAT THEY ARE SAYING:

BBC business editor Robert Peston, on BBC.co.uk: "[The report is a] humiliating 800-page catalogue of how they enriched themselves while the last UK-owned mass market motor manufacturer hurtled towards insolvency".

Labour MP Richard Burden, in the Daily Mail: "Like most other people, I have found it frustrating that the inquiry has taken so long and astonishing that it has cost around £16 million. Lessons should be learnt."