SFO will not investigate MG Rover collapse
The Serious Fraud Office (SFO) has said it does not intend to launch a criminal investigation into the collapse of carmaker MG Rover.
Its announcement comes a month after Business Secretary Lord Mandelson asked the SFO to study the results of a four-year independent report into the saga.
Birmingham-based MG Rover collapsed in 2005 with the loss of 6,500 jobs.
The four executives in control of MG Rover, the so-called Phoenix Four, have always denied any wrongdoing.
The four – John Towers, Nick Stephenson, Peter Beale and John Edwards – came in for criticism after the firm’s collapse when it was revealed that they had taken out an estimated £40m in pay and pensions.
A spokesman for the four said last month that “both the National Audit Office and the MG Rover administrators, PWC, carried out thorough investigations into the company’s affairs and concluded there was no evidence whatsoever of any wrongdoing”.
Its study of MG Rover comes after the completion of a four-year inquiry under section 432 of the Companies Act by independent inspectors appointed by the Department for Business, Innovation and Skills. This report has not yet been publically released.
The Phoenix Four took control of MG Rover in May 2000 after buying it from previous owner BMW for a nominal £10. They also gained an interest-free loan of £427m from the German firm.
They were eventually unable to turnaround MG Rover’s fortunes, and it went into administration under insolvency procedures in April 2005, with debts of more than £1bn.
Its assets were subsequently sold in 2006 to China’s Nanjing Automobile, which revived the MG sports car brand.
MG ROVER’S DEMISE
2000: Sold by BMW to the Phoenix Four for £10
2000-2004: Made losses of £611m in the first four years
2004: Started talks with Shanghai Automotive Industry Corporation (SAIC)
2005: SAIC pulled out of a deal to save the whole company and MG Rover goes into administration
2006: MG Rover’s assets sold to Nanjing Automobile
2007: Nanjing resumes MG production at the Longbridge plant
Source: BBC News
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