The £16 million, 850 page report into the collapse of MG Rover has been published today, with the government planning to stop the four former bosses ever running a company again.
The history of MG Rover is a gloomy one for the UK manufacturing industry, which finally led to the demise of mass production of cars by a UK company. The so-called ‘Phoenix Four’ – John Towers, Nick Stephenson, Peter Beale and John Edwards – bought the car company from BMW for just £10 in 2000 and over four years made a total loss of more than £611m, forcing them to look for a new buyer or face administration.
When the inevitable happened in 2005, 6,500 workers were made redundant and new buyers were found – Nanjing Automobile – which moved major production to China.
The report, led by accountancy firm BDO Stoy Hayward and government-appointed inspectors Guy Newey QC and Gervase MacGregor has taken over four years to complete and reportedly cost £16m.
In announcing the findings of the report Business Secretary Lord Mandelson said that lawyers are already compiling the evidence to bring court proceedings against the former directors for their part in the downfall.
Inspectors handling the report investigated a number of anomalies which could have led to the collapse: restructuring of the company which led to the creation of 33 separate companies; the scale of financial rewards made to the directors; the role of professional advisors; and the purchase, installation and operation of computer software by Peter Beale the day after the inquiry was announced, which eliminated crucial evidence.
The report says that between them, the four directors received nearly £40m in financial rewards.
Lord Mandelson commented: “It was important to get all the facts into the open so that workers who lost their jobs and creditors who were not paid know the truth.
“Action is being taken. Based on this report, work has been commissioned to start legal proceedings to seek to declare relevant directors unfit to hold office and to disqualify them from management of any company in the future.”
Lord Mandelson also went on to say he will be asking the Financial Reporting Council to review the report to see if any changes to audit or accounting standards or guidance should be considered.
MG Rover continues to have a facility in the UK at Longbridge, which was reopened in August 2008 to restart assembly of the MG TF Roadster for the European market.
The history of MG Rover is a gloomy one for the UK manufacturing industry, which finally led to the demise of mass production of cars by a UK company. The so-called ‘Phoenix Four’ – John Towers, Nick Stephenson, Peter Beale and John Edwards – bought the car company from BMW for just £10 in 2000 and over four years made a total loss of more than £611m, forcing them to look for a new buyer or face administration.
When the inevitable happened in 2005, 6,500 workers were made redundant and new buyers were found – Nanjing Automobile – which moved major production to China.
The report, led by accountancy firm BDO Stoy Hayward and government-appointed inspectors Guy Newey QC and Gervase MacGregor has taken over four years to complete and reportedly cost £16m.
In announcing the findings of the report Business Secretary Lord Mandelson said that lawyers are already compiling the evidence to bring court proceedings against the former directors for their part in the downfall.
Inspectors handling the report investigated a number of anomalies which could have led to the collapse: restructuring of the company which led to the creation of 33 separate companies; the scale of financial rewards made to the directors; the role of professional advisors; and the purchase, installation and operation of computer software by Peter Beale the day after the inquiry was announced, which eliminated crucial evidence.
The report says that between them, the four directors received nearly £40m in financial rewards.
Lord Mandelson commented: “It was important to get all the facts into the open so that workers who lost their jobs and creditors who were not paid know the truth.
“Action is being taken. Based on this report, work has been commissioned to start legal proceedings to seek to declare relevant directors unfit to hold office and to disqualify them from management of any company in the future.”
Lord Mandelson also went on to say he will be asking the Financial Reporting Council to review the report to see if any changes to audit or accounting standards or guidance should be considered.
MG Rover continues to have a facility in the UK at Longbridge, which was reopened in August 2008 to restart assembly of the MG TF Roadster for the European market.
To see the full report, visit www.bis.gov.uk/mgrover-report.
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