Morning:
12°c
- Chris Blackhurst: Greedy, yes, but can you touch them for it?
- Phoenix Four hit back at whitewash - the statement in full
- 830 page MG Rover report details restructuring changes
- Disgraced MG Rover boss paid his lover £1.7m
- The men who paid £10 and made £40m
- Labour ‘spin’ condemned for rescue talks leak
- MG Rover records 'deep-cleaned'
- Deloitte off the hook over ‘lack of transparency’
- A phoney lord but no fraud, says Moulton
A bitter slanging match broke out tonight between Lord Mandelson and the Phoenix Four over the collapse of MG Rover.
The Business Secretary vowed to ban the four men from running companies after an official report found they pocketed tens of millions of pounds during the carmaker's demise.
Lord Mandelson said: “These people feathered their own nests and filled their own pockets full of a lot of cash during the course of their time as directors. It shows real brass neck not to show an ounce of humility or offer an apology.”
But the former MG Rover directors — John Towers, John Edwards, Nick Stephenson and Peter Beale — branded the report “a witch-hunt” and “a whitewash” and accused Mandelson of “political grandstanding”.
They said: “The report is entirely as we expected — a witch-hunt against us and a whitewash for the Government. It drips with the hallmarks of this Government — spin, smear and point-blank refusal to take any responsibility for their own actions.
“We criticised the Government for failing to help MG Rover. As we have seen elsewhere, there is a price to be paid for criticising this Government and for us the price is this report.”
The 850-page report cost the taxpayer £16 million — far more than the Government spent trying to save MG Rover — and laid bare the shocking state of the finances at the Longbridge carmaker.
The Phoenix Four bought MG Rover for just £10 from BMW in May 2000 and were given a £427 million loan by the German carmaker.
But over the next five years MG Rover racked up losses of £1 billion and collapsed in April 2005 with debts of £1.3 billion and the loss of 6500 jobs.
The Phoenix Four blamed the fall of MG Rover on the Labour Government's refusal to support it.
“Our remuneration was not the reason for the collapse,” they said. “The real reason is the Government bungled the last chance to save MG Rover.”
But Lord Mandelson said ministers were “faultless” in their efforts to save the company and the jobs.
He also urged the Phoenix Four to “voluntarily disqualify themselves” from being directors.
“If they don't do that, I will initiate proceedings against them, but it will cost taxpayers less if they do it themselves,” said Lord Mandelson.
“Action is being taken. Based on this report, work has been commissioned to start legal proceedings to seek to declare relevant directors unfit to hold office and to disqualify them from management of any company in future.”
Leading City lawyer Clive Zietman, head of commercial litigation at Stewarts Law, said the businessmen could be banned as directors within six months — but only if the Government moved very fast. Others doubted whether the Government could carry out its threat.
Employment lawyer Emma Clark of Fox Lawyers said: “I can understand morally why the Government wants to ban the Phoenix Four from acting as directors, but the legal position is far from clear. It could take years before the final court decision. Usually an application to disqualify needs to be brought within two years of MG Rover's collapse.
“There would need to be extra special reasons to work outside this time-frame which has of course now passed. It might be that the Government will have to change the law. The onus is on the Government to bring a strong legal case against the Phoenix Four showing serious misconduct.”
Reader views (15)
I suppose Lord Mandelson is well aware of the process of feathering one's nest. Plenty of that goes on in the EU environment from which he has relatively recently emerged.No doubt the lack of empathy for the four directors is well merited, but for the enquiry to pronounce the Government as squeaky clean rather stretches the imagination. Labour will do anything to appease the Trade Unions and regularly bails out hopeless cases, at vast public cost, in the vain hope of saving jobs and, let's face it, Gordon Brown is having a meeting this weekend with TU leaders to work out the latest version of that phenomenon. We need some people banned from Government and public life.
- James Elliott, Eastbourne UK
Jon Molton of Alchemy had plans for Longbridge but it meant keeping on MG and dropping some other parts which meant redundancies to which Tony Woodley of the unions screamed at the government to drop the plan. The Trade and Industry secretary the well known NHS supremo, in her previous incarnation, Patricia Hewett rejected the offer to avoid these small number of redundancies. But the whole place closed down later due to the nose in the trough managers and ALL the workers were made redundant.
- Robert Thornton, Malaga, Spain
Oh Mandy you are a card. Kettle - Pot and Black come to mind. If anyones got a brass neck its you. I think Mandys pontifications are all about diverting blame away from his boy, one Gordon Brown, rather than an honest appraisal of what went on. Nice to slide the story out at the same time, along side the relevations that Joe Public will have to have a police check for driving his kids mates to football training. Hey ho nothing changes. Perhaps likewise we too can take legal action against both Mandy and Gordon to ensure they don`t ever run this country again. After all they have helped make UKPLC both financially and morally bankrupt. Surely enough reason to disqualify them both from political office for ever.
- B Gare, Norfolk Gorleston
Saw humbug Mandelson performing his usual "not me guv' routine on the news at lunchtime."
But Mandy is the one who exposed it and is chasing after them. The Tories have been noticeably silent on this affair
- Keith Price, Luton England
I have no sympathy with the four but what has happened to justice. If they have committed offences charge them and let them languish in jail or pay substantial fines. But if the SFO have declined to pursue he case how can anyone justify punishment for offences nor proven.
- Alan Jones, wexford ireland
Saw humbug Mandelson performing his usual "not me guv' routine on the news at lunchtime.
I don't believe Mandelson, and I hope this thing rumbles on, with David Cameron putting his attack dogs onto the glaring `between-the-lines' omissions from this so-called "Report".
- Ted, London
The same is lining up for Vauxhall, this is how it works:
-Threaten the Government that you will close down a car factory making thousands redundant ( can't do this elsewhere in Europe due to more stringent employemt laws)
- Ask for a huge goverment 'investment'. You may only get 50%, but anything is good.
-Once approved asset strip the company
-Walk away knowing there will be no come back even after a £16 million enquiry
-Enjoy your retirement.
- Paul B, London
The Government seeks to avoid responsibility in this fiasco. But it was the Government which mishandled the matter, allowing the new owners of Rover to rake it in - quite legally. The Government has a long record of such mismanagement. Look at the Dome. Look at manager-top-heavy NHS. Look at the way they handed the doctors a 40 per cent rise as an opening bargain chip. The docs couldn't believe their luck. We, the taxpayers, can't believe our bad luck to have such bunglers running the country.
- Js, Woking
keith price is at it again,nurse the screens..
liebore bought votes in may 2005.notice another independant stitch up.dr kelly ,iraq war, etc....
everything liebore touches stink....
notice all liebore mp's are teflon coated...
not for long......
- David Fitzgerald, coventry,england
Alchemy Partners were shoved aside by the government, which insisted the "Phoenix Four" should run Rover. This was a government-mandated decision. The government is entirely responsible for the fraud and theft that finished off Rover. We are government by thieves, liars and cheats.
- Neil, London, London UK
With 9 mill in the bank do you really think they give a damn. This is a whitewash. Why wasn't Byers and his rotten crew even mentioned?
- Steve, Brentford
This is just a joke... but not a very funny one.
- Goggs, London
Nice work if you can get it!
Wow, losing the right to be a director of a company. Big deal if you're going to end up with c. £10m in your pocket!
Who needs to be a company director with that amount of money to sail off into the sunset and put your feet up!
And at just over £18,000 per page it must be trebles all round too for Deloitte, the authors of the report
- Neil Stewart, Clay Cross
This whole enquiry is turning into just another Labour party whitewash. It is nothing more than an attempt to deflect criticism away from the descisions made by the then Labour Secretary of State for Trade and Industry, Alan Johnson, to give £6m of taxpayers money to Rover in order to keep the Longbridge plant open until after the General Election of May 2005. At the time this raised questions about Labour's economic competence and political integrity and was/is seen by many as a blatent use of taxpayers money in a crude attempt to support the Labour vote in Birmingham. Post Longbridge events have confirmed that the Labour party, under both Brown and Blair, are prepared to make use of taxpayers money to fund their own political ideology. To cap it all the very idea that someone with Peter(mendacious)Mandelson's track record of personal probity in financial matters, is now threatening to take legal action to disqualify the original company Directors for financial mismanagement, is a joke in itself.
- Pete, Croydon Uk
These four are just common thieves, whichever way you look at it. Stealing from us, the nation, makes them worse than any benefit scroungers we have ever encountered. They should be tried in court for their actions.
- Keith Price, Luton England
