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Old 06-07-2009, 01:01   #1 (permalink)
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Fraud probe into MG Rover demise

Quote:
Originally Posted by BBC News

The Serious Fraud Office is to investigate the circumstances surrounding the demise of Birmingham-based carmaker MG Rover in 2005.

BBC business editor Robert Peston says Business Secretary Lord Mandelson will issue a brief written statement on Monday confirming the move.

It follows a four-year inquiry into the collapse, which led to 6,000 job cuts.

The four executives in control of MG Rover at the time said there was "no suggestion of improper conduct".

A spokesman for the MG Rover directors said: "The directors have at all times willingly accounted for their actions, which kept MG Rover alive for five years."

When the MG plant at Longbridge, Birmingham, closed the government announced a £150m support package for those losing their jobs and for the estimated 12,500 people affected in subsidiary firms.

Report delayed

The new investigation comes after the completion of a four-year inquiry under section 432 of the Companies Act by inspectors appointed by the Department for Business, Innovation and Skills.

Part of that investigation was supposed to find out what had happened to the more than £400m left to Phoenix Ventures when it took over MG Rover from BMW in 2000.

Our correspondent says the report by the business department's inspectors will now be delayed pending a decision on whether there will be criminal prosecutions.

MG Rover went into administration under insolvency procedures in April 2005, with debts of more than £1bn. Its assets were sold in 2006 to China's Nanjing Automobile, which revived the MG sports car brand.

A quartet of executives known as the Phoenix Four had taken control of the company in May 2000 after originally buying MG Rover for a nominal £10.

The business came with an interest-free loan of £427m from BMW, the previous owner.

"John Towers, Nick Stephenson, Peter Beale and John Edwards are estimated to have taken out more than £40m in pay and pensions in the years before the business went down," said our correspondent.

The Commons public accounts committee criticised the government in 2006 for being too distant from Phoenix Ventures and not sufficiently prepared for its demise.

Our correspondent says there are likely to be questions raised about why the case has been referred to the Serious Fraud Office only after completion of the inspectors' inquiry, rather than bringing in police at an earlier stage.

'Heart of the matter'

A spokesman for the directors said that "time and again they asked for government help and didn't get it".

"Four years and £16m of taxpayers' money has been swallowed up on this [Department for Business] inquiry and the directors' major concern 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 eleventh hour, allowing 6,000 workers to lose their jobs," they said.

Their statement added: "Four years on, any suggestion of another further investigation is frankly ridiculous and smacks of kicking this issue into the long grass."

They also said the government had refused more than 30 requests under the Freedom of Information Act which would have revealed correspondence and documents.

They said these would have "shed some light on the government's role in the affair".
Source: http://news.bbc.co.uk/1/hi/business/8134981.stm
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Old 06-07-2009, 01:05   #2 (permalink)
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why do they have to dig up all this crap, its dead and burried, MG are getting back on their feet, is there really any need for this negative publicity?
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Invest your over time in the stock market. barclay at 60p in feb are know £3.60. Do mot waste it on a rover, ooops a MG zr.
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Old 06-07-2009, 01:06   #3 (permalink)
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interesting
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Old 06-07-2009, 01:17   #4 (permalink)
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Apparently it's so that any wrong doing involving the government wont be revealed until after a general election.
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Old 06-07-2009, 02:10   #5 (permalink)
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Apparently it's so that any wrong doing involving the government wont be revealed until after a general election.
pretty much
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Old 06-07-2009, 09:12   #6 (permalink)
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so basically the first investigation found no wrong doing but they still think that the directors still had an involvement in its demise?
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Old 06-07-2009, 09:18   #7 (permalink)
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All too convenient IMO

They'll announce exactly what the rest of us have known for years. Not that it makes a difference as the Phoenix four are laid out relaxing on tropical beaches now and can't be touched by the law over here.

The damage is already done, if anything, the question should be why has it taken all this time to investigate it properly? As Roverman said, the government knew what was going on and let it happen, what they didn't want is it all coming out while they were running the country as they wouldn't be running the country now if it had.

The whole thing stinks of Bullsh*t IMO
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Old 06-07-2009, 09:24   #8 (permalink)
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the thing that ****e me off it that fiat have been bailed out by the italian government time after time after time, now theyre one of the biggest car manufacturers in the world.

this country and government really piss me off sometimes, they just go for the easy option and let it all go to the wall
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Old 06-07-2009, 14:16   #9 (permalink)
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Quote:
Originally Posted by BULLITT View Post
All too convenient IMO

They'll announce exactly what the rest of us have known for years. Not that it makes a difference as the Phoenix four are laid out relaxing on tropical beaches now and can't be touched by the law over here.

The damage is already done, if anything, the question should be why has it taken all this time to investigate it properly? As Roverman said, the government knew what was going on and let it happen, what they didn't want is it all coming out while they were running the country as they wouldn't be running the country now if it had.

The whole thing stinks of Bullsh*t IMO
+1

The only reason the fab 4 got the contract was that they promised to keep everyone in employment.

Fiscally, everyone knew this would be impossible long term, but it was close to an election so they got the contract over another guy, who suggested to cut the workforce down and build just the TF initially under the MG brand (which I believe would have worked long term).
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