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MG Rover faces scrutiny

31 May 2005

The affairs of MG Rover and its directors are to face further wide-ranging scrutiny after concerns about the collapsed manufacturer’s finances were raised by an independent investigation.

CityRover

The affairs of MG Rover and its directors are to face further wide-ranging scrutiny after concerns about the collapsed manufacturer’s finances were raised by an independent investigation.

Trade and industry secretary Alan Johnson today appointed inspectors with far-reaching powers to look into the car maker’s dealings. The move follows an initial report by the Financial Reporting Review Panel (FRRP), which said a number of questions would be worth further investigation.

The FRRP’s report will not be released by the Department of Trade and Industry (DTI) ahead of the so-called section 432 inspection, which can demand to see documents and force witnesses, including directors, to attend hearings.

Such inspections have previously lead to directors of other companies being disqualified and prevented from running a business.

The DTI was not able to say whether it might also have the power to force MG Rover directors to surrender personal funds and help to pay off debts of almost £1.5 billion.

Johnson said: ‘I am grateful to the FRRP for its report. It raises a number of questions that need to be answered. People want to know what happened. The appointment of administrators on April 8 was a huge blow.’

The DTI has given no timetable for when the inspectors will publish their findings, but Johnson has asked for their report ‘as quickly as possible’.

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