The MG Rover administration procedure is getting interesting with a report in the Daily Telegraph on Friday saying the defunct automaker’s future could be settled in court after the company’s administrator challenged claims by Shanghai Automotive Industry Corporation that it already owned far reaching intellectual property rights to the UK firm’s products.
The paper noted that the news came as the administrator PricewaterhouseCoopers (PwC) raised the prospect of more redundancies at MG Rover, which has kept on 1,100 workers from the 6,100 originally employed at its Longbridge car plant – Tony Lomas, a PWC partner, said: “We are also looking at further ways to reduce the cost of mothballing the plant.”
The Daily Telegraph said SAIC believes that it bought most of the company’s intellectual property rights in a £67 million deal last August but Lomas reportedly said this was now open to question.
“We are currently reviewing with our lawyers precisely what IPR had purportedly been acquired by SAIC, and the price they paid for it,” he told the newspaper.
Lomas reportedly said there was also intense interest from developing countries looking for a “technological leap forward” by buying MG Rover’s modern production capabilities and warned that some of these countries were “less sensitive to trademark protocols”, suggesting that they might buy parts of MG Rover regardless of what the Chinese thought.
The newspaper said PWC appears to be taking a tough line on SAIC, which pulled out of takeover talks after raising concerns about MG Rover’s financial position.
One source told the Daily Telegraph: “They didn’t buy what they thought they bought. The only rights they have are ‘parts’ exclusive to particular models. But that is only a minor part of the whole Rover operation. The existence of a common platform foundation changes everything in terms of intellectual property law.”
However, a spokesman for SAIC told the paper that the car company was “quite confident that it has legal title”. He reportedly added: “As far as we are concerned we got the IPR on the Rover 45, Rover 75, part of the Rover 25 and Powertrain [the K, KV and L series engines].”
A source close to SAIC told the Telegraph PwC was probably keen to flush out the company’s intentions because without its permission “nobody else can make a Rover”. The source reportedly added: “They are trying to get the Chinese to say ‘what we would want to do is to buy this, this and this’. I suggest we are going to have an argument between lawyers.”
At the Shanghai Motor Show on Thursday, a SAIC spokesman told the Telegraph: “The purchase was to support Rover’s financial situation. Looking to our future we believe that to win in China and to compete in the global marketplace we have to have our own brand. But we don’t want to start from zero. We have to build on something. Something like Rover will help us.”