MG Rover inquiry published
- Directors attacked in report
- One 'misled' a government committee
- Pay was 'unreasonably large'
The government announced today announced that it was to start legal proceedings against the so-called 'Phoenix Four', the directors of MG Rover when it went into administration in 2005.
The news comes after the Government published the findings of an independent inquiry into the company's collapse. This centred on the five-year period between the MG Rover Group being bought (for a nominal £10) from BMW and the point at which it went into administration.
The report looked particularly into the actions of four directors – Peter Beale, John Edwards, Nick Stephenson and John Towers – as well as the restructuring of the Group and the payments made to the directors.
It also investigated the use of computer software – on the day after the inquiry was announced – to eliminate evidence held by Peter Beale, as well as finding that he had given 'misleading explanations' to the Trade and Industry Select Committee in March 2004.
The report says: 'During the five-year period, the members of the Phoenix Consortium and Mr Howe [MG Rover’s Chief Executive] obtained large, and we say unreasonably large, financial rewards, totalling tens of millions of pounds.'
According to the report, members of the consortium received about £9 million each and Mr Howe received £5.7 million. It goes on to say that the men gave themselves 'rewards out of all proportion to the incomes which they had previously commanded, which were also large when compared with remuneration paid in other companies and which were not obviously demanded by their qualifications and experience'.
Announcing the findings, Business Secretary Lord Mandelson said: 'Based on this report, work has been commissioned to start legal proceedings to seek to declare relevant directors unfit to hold office and to disqualify them from management of any company in future.'
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