Rover bosses attack fraud inquiry move

FORMER bosses of failed car marker MG Rover today accused Ministers of attempting to “disguise their own failings” after Business Secretary Lord Mandelson confirmed that the Serious Fraud Office had been asked to investigate the firm's collapse in 2005.

FORMER bosses of failed car marker MG Rover today accused Ministers of attempting to “disguise their own failings” after Business Secretary Lord Mandelson confirmed that the Serious Fraud Office had been asked to investigate the firm's collapse in 2005.

In a written statement to Parliament, Lord Mandelson said the SFO had been requested to “consider whether there should be a criminal investigation” following the completion of a four-year independent inquiry.

The Department for Business, Innovation and Skills said the publication of the inquiry report - by Gervase MacGregor, a senior partner at accountancy firm BDO Stoy Hayward, Guy Newey QC, an insolvency law specialist - would now be delayed “to ensure any potential prosecution is not prejudiced”.

However, the move prompted questions as to why, if criminal activity was suspected, the SFO had not been brought in earlier.

And the four former managers behind Phoenix Ventures, which bought MG Rover from BMW in 2000, claimed the Government was attempting to shuffle the report “into the long grass” to avoid its own record coming under scrutiny.

The collapse of Birmingham-based MG Rover led to the loss of 6,000 jobs at the car maker and thousands more at affected suppliers and dealers. However, in a report six months after their appointment, the administrators said they had found no evidence of improper conduct by the management.

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The Phoenix Ventures management - the so-called Phoenix Four - were reported at the weekend to have taken out an estimated �40 million from MG Rover in pay and pensions in the five years they were in charge, although a spokesman for the four said yesterday that the total sum was closer to �30million.

A statement for the four, former chairman John Towers, plus Peter Beale, John Edwards and Nick Stephenson, who paid a nominal �10 for the business in 2000, criticised the Government for repeatedly turning down requests to help the company.

“Four years and �16million of taxpayers' money has been swallowed up on this inquiry, and the directors' major concern is that it will fail to get to the heart of the matter, which is why the Government withdrew its offer of a loan to the company at the 11th hour,” said the statement.

Of the decision to call in the SFO, it added: “This tactic is probably the only way the Department of Business can realistically avoid publishing a report that, if fair and balanced, will undoubtedly be critical of their and the Government's overall role in MG Rover's demise.

“Another inquiry is the last thing people want, and failure to publish the report lets down the 6,000 people who lost their jobs.

“We suspect this is nothing more than a Government ruse to disguise their own failings, shift the blame to others and kick the inquiry report into the long grass until after the election, spending yet more taxpayers' money in the process.”

Lord Mandelson said its position on the report's publication would be reviewed following the outcome of the SFO probe.

In 2006, the Government was criticised by the Commons public accounts committee for being too distant from Phoenix Ventures.