One of the two UK Department of Trade and Industry inspectors investigating the collapse of MG Rover has charged nearly £12,000 a day for three months’ work, according to the Daily Telegraph.
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Industry sources told the paper the inspectors are also understood to be planning to roll out the investigation for another five years until 2010, fuelling fears that the tax payer will be left with a multi-million pound bill.
The paper said that after Trade and Industry Secretary [chief government minister] Alan Johnson ordered a full DTI investigation into MG Rover’s collapse, two inspectors were appointed: Guy Newey QC, a former DTI inspector, and Gervase MacGregor, head of forensic accounting at accountancy firm BDO Stoy Hayward.
Figures revealed under the Freedom of Information Act reportedly show that MacGregor and BDO Stoy Hayward lodged a £1.09m bill, including VAT [tax] and “disbursements” for the three months to August 31. The bill works out at £11,860 a day and it was not revealed how much Newey is charging, the Daily Telegraph said.
A source reportedly warned that the inquiry might not be finished until 2010, telling the paper: “It is going to take years – 2010 is a reasonable working estimate. There has only been one investigation that has taken less than six years…”.
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By GlobalData“The public purse will be between £5m and £20m worse off. At least [for the government] it will take it past the next election.”
A BDO spokesman reportedly declined to discuss the fee with the paper.
The DTI reportedly defended the fees charged by BDO Stoy Hayward and MacGregor. A spokesman told the Daily Telegraph: “The charges have been scrutinised and we are satisfied they are reasonable and reflect work undertaken.”
The DTI reportedly added that the fee compared favourably with the £100m bridging loan which was considered before MG Rover collapsed.
It told the newspaper: “Compared with the size of the potential bridging loan, the department considered the expenditure on the necessary high level expertise to be proportional.”
The Daily Telegraph said advisers’ bills from the collapse of the British car manufacturer, with the loss of over 6,000 jobs, in April is mounting by the day and has already cleared £5m with almost every big UK accountancy firm benefiting.
The paper said figures obtained by Accountancy Age magazine show that KPMG billed the DTI £340,325 for its work.
The Daily Telegraph noted that, last June, Price Waterhouse Coopers, MG Rover’s administrator, said it had earned £4m in fees from the car maker’s collapse.
Deloitte, auditor to MG Rover and its parent company Phoenix Venture Holdings, was paid £7.8m between 2000 and 2003, the report added, noting that Deloitte is now the subject of an investigation by the UK’s Accountancy Investigation and Discipline Board.
The firm stands by its audit and denies any wrongdoing, the Daily Telegraph added.
