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Action taken against Rover bosses Rover boss pay 'unreasonably' big
(10 minutes later)
Executives who ran collapsed carmaker MG Rover are to be banned from running other companies, the government says. The executives who were running carmaker MG Rover when it collapsed received "unreasonably large" payments, an independent report has said.
A report into the collapse of the firm, just released, says that executives took about £42m in pay and pensions from the troubled firm. The five took about £42m in pay and pensions from the troubled firm.
Business Secretary Lord Mandelson said action would be taken to stop them holding company office. The men will be banned from running other companies, the government says.
The men - the so-called Phoenix Four - described the report as a "witchhunt" and a "whitewash for the government". The so-called Phoenix Four, plus chief executive Kevin Howe, described the report as a "witchhunt" and a "whitewash for the government".
MG ROVER'S DEMISE 2000: Sold by BMW to the Phoenix Four for £102000-2004: Made losses of £611m in the first four years2004: 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 administration2006: MG Rover's assets sold to Nanjing Automobile2007: Nanjing resumes MG production at the Longbridge plant2009: Serious Fraud Office investigates circumstances of collapse but says no plans for criminal charges2009: Long-awaited report, which has cost more than £16m, is released Timeline: MG Collapse In pictures: Rover's history Robert Peston on Rover
"Our remuneration was not the reason for the collapse. The real reason is the government bungled the last chance to save MG Rover," they added."Our remuneration was not the reason for the collapse. The real reason is the government bungled the last chance to save MG Rover," they added.
The 850-page report, which took four years to produce and cost about £16m said that the payouts to the Phoenix Four, and chief executive Kevin Howe were "unreasonably large". The Serious Fraud Office (SFO) has said it does not intend to launch a criminal investigation into the collapse, which saw about 6,500 people lose their jobs.
The 850-page report took four years to produce and cost about £16m.
MPs investigating the demise of the firm were given "inaccurate and misleading information" by one of the four directors, the report added.MPs investigating the demise of the firm were given "inaccurate and misleading information" by one of the four directors, the report added.
It also found evidence of questionable briefings to the press by government officials.It also found evidence of questionable briefings to the press by government officials.
The demise of MG Rover, in 2005, brought an end to mass-production of cars by a UK company.
The Phoenix Four were chairman John Towers, ex-vice chairman Nick Stephenson, Peter Beale and John Edwards.
They took control of MG Rover in May 2000 after buying it from previous owner BMW for a nominal £10 - beating off an approach from venture capitalists Alchemy Partners. They also gained an interest-free loan of £427m from the German carmaker.
They were eventually unable to turn around 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, but moved most of the production to China.