The enquiry into the collapse of MG Rover, which has taken an extraordinary four years and £16m to complete, has finally published its findings – and it points the finger directly at the company’s former directors. The so-called Phoenix Four supposedly took £40m out of the failing company to line their own pockets – and although they’re not accused of breaking any laws, Lord Mandelson now wants them disqualified as company directors. The four men are refusing to take the findings lying down, accusing the report of being a ‘whitewash for the Government’. But whatever the rights and wrongs of the situation, it won’t get those 6,500 Rover employees their jobs back...
Phoenix Four were hailed as saviours when they managed to tie up a deal for Rover in 2000, keeping it out of private equity’s clutches. But five years later, despite a £400m dowry from former owner BMW, the car company went bust and its entire workforce lost their jobs. Now this ‘independent’ enquiry, which was launched soon after and has been going on ever since (at vast expense to the taxpayer) has concluded that the Phoenix Four siphoned cash out of the company (albeit perfectly legally), paid out £1.6m to a consultant who was in a relationship with one of them, tried to hide evidence, and gave misleading information to investigators. There’ll be no criminal charges, apparently, but Mandy wants to get them banned ASAP. Apparently he's not 'intensely relaxed' about these particular people getting filthy rich (although if naked greed is now a criterion for disqualification, a lot of directors have cause to be nervous).
However, the Four are refusing to go quietly into the night, not least because the Government gets off pretty much scot-free. They released a joint statement today saying that the report’s findings were pre-ordained, describing it as ‘a witch hunt against them… it drips with the hallmarks of this government – spin, smear and point-blank refusal to take any responsibility for their own actions’ (playing to the gallery there). The directors, who have consistently denied any wrongdoing, reckon they’re just paying the price for criticising the powers-that-be: their claim is that if the Government had backed a potential joint venture with the Chinese, Rover would never have gone bust. Although of course, they would say that.
Whichever way you look at it, this was a disastrous episode in British industrial history – and this ridiculously protracted enquiry has been equally unimpressive (it was undoubtedly a complex situation, but still – four years and £16m?). The fact that the Phoenix Four could take all that money out, without breaking any laws or even breaching their fiduciary duties, represents a shameful failure of the system. And it’s those 6,500 workers who paid the price.
In today's bulletin:
Row erupts as Rover enquiry slams directors - but clears Government
Wetherspoon still merry after record sales
Police raid Sports Direct after JJB blows the whistle
Fears mount for Vauxhall as GM picks Magna
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