The UK’s Serious Fraud Office is being called in to decide whether a criminal investigation should be launched into the 2005 collapse of carmaker MG Rover.
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Business minister Peter Mandelson said: “There has been a comprehensive and thorough investigation into the events which led to the company failing, workers losing their jobs and creditors not getting paid. The SFO must now see if there are grounds for prosecution.”
The move will delay the publication of the results of a GBP16m (US$26m), four year inquiry into the failure of MG Rover which went into administration with debts of almost GBP1.3 bn ($2.1 bn) and the loss of 6,000 jobs.
The report was completed on 11 June but the government said its publication could prejudice any potential criminal case. However, opposition politicians said the delayed government report shows Labour, in power since 1997, wasted millions of taxpayers’ money propping up the car company in the run-up to the 2005 election.
MG Rover was bought by four car industry executives, known as the Phoenix Four, in May 2000 for a nominal sum of GBP10 with an interest-free loan from previous owner BMW.
The four, former MG Rover chief executive John Towers, Nick Stephenson, Peter Beale and John Edwards, said there was no basis for the SFO investigation which was expected to focus on the five years the company was controlled by the Phoenix Four before it went into administration in April 2005. During that period the four executives are thought to have paid themselves more than GBP40m in salaries and pensions.
The four directors deny any wrongdoing over the collapse of the company and have pointed to the report of administrators PriceWaterhouseCoopers – shortly after they took over running of MG Rover – which cleared them of wrongdoing.
