Mandelson seeks punishment for ‘Phoenix Four’
By Liz Stephens
Lord Mandelson has asked government lawyers to compile evidence against former executives of MG Rover after the Serious Fraud Office (SFO) announced it would not be launching a criminal investigation into the company’s collapse.
The business secretary is believed to have been disappointed and angered by the SFO’s decision.
However, this afternoon it was revealed his department has received independent legal advice that the so-called ‘Phoenix Four’ could be disqualified from corporate life.
Last month, business secretary Lord Mandelson asked the SFO to study the results of a four-year independent report into the carmaker, which collapsed in 2005 with the loss of 6,500 jobs.
The four former executives in charge of the company have always maintained there was no wrongdoing involved.
A spokesman for the ‘Phoenix Four’ said: “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.”
“The decision to refer the matter to the SFO was the latest in a long line of bizarre and wholly unnecessary twists in the MG Rover story,” he said.
“The directors and many others with an interest in MG Rover fear that anyone thinking that this inquiry will get to the heart of the matter is in for a disappointment.”
Lord Mandelson countered: “I sense rather a lot of buck-passing on the part of the Phoenix Four.
“I think what people will be asking themselves now is whether they as individuals are fit to conduct themselves as directors of companies in the future.”
“It was important to have clarity on whether or not this was a case that the SFO should be investigating.
“The workers who lost their jobs and the creditors who were owed nearly £1.3bn by the collapse deserved no less.
“They have waited a long time to see the findings of the report and the way is now clear for us to publish.”
Shadow business secretary Ken Clarke said: “I always thought the Serious Fraud Office would not allow themselves to be used as an excuse for delay.
“My suspicion has always been that delayed publication of the report was being sought because of criticism of the government within it – I wait to see if my fears are allayed.”
John Towers, Nick Stephenson, Peter Beal and John Edwards, were heavily criticised at the time of the collapse after it was discovered they had awarded themselves in the region of £40 million in pay and pensions.
The four executives bought the troubled company from BMW in 2000 for £10 but it went into administration five years later with debts of over £1 billion.
The company’s assets were later sold in 2006 to Nanjing Automobile, which revived the MG sports car brand.
The independent report into the collapse of MG Rover will not be published until 11 September.
