New inquiry into Rover collapse
There is to be a independent inquiry into the events surrounding the collapse of MG Rover, Trade and Industry Secretary Alan Johnson announced today.
He has appointed a team of inspectors to investigate and report publicly on the affairs of the MG Rover Group, including Phoenix Venture Holdings Ltd and MGR Capital Limited.
The investigation follows a separate inquiry by the Financial Reporting Review Panel. This report has though not been published and Mr Johnson said he would not be releasing it, saying: “I have been advised that to do so would be prejudicial to those potentially affected by it and to the regulatory process.”
The minister said though that the report raised “a number of questions that need to be answered”.
“The appointment of administrators on April 8 was a huge blow to the employees of the company, to their families, to MG Rover’s suppliers and the local community. People want to know what happened,” Mr Johnson said.
“The public interest requires that the issues raised by the FRRP and developments after 2003 when the last accounts were published be investigated by independent investigators.”
The inspectors are QC Guy Newey and senior accountant and fraud expert Gervase MacGregor.
Shadow Trade and Industry Secretary David Willetts said that the inquiry must not ignore the role of the DTI in the collapse.
Mr Willetts said: “I welcome today’s announcement of a public inquiry. I urged Alan Johnson to make at least part of the findings of the Financial Reporting Review Panel report into Rover public two weeks ago. By choosing not to do so, there remains a lingering suspicion that the Department for Trade & Industry themselves may have something to hide.
“Public confidence in the DTI can only be restored if the new inquiry is allowed to examine the role of the government over the entire five-year period leading up to the collapse of MG Rover.”
And Liberal Democrat counterpart Norman Lamb echoed these sentiments saying that confidence had not been restored.
Mr Lamb said: “The Government is failing to build any confidence in this process. The Financial Reporting Council’s report should be made public and a wider inquiry needs to be launched.
“The wider inquiry should include an examination of the circumstances surrounding the original acquisition of Rover by the Phoenix Consortium, and of the Government’s role in the company’s collapse.”
Nearly 6,000 workers have lost their jobs since Rover filed for bankruptcy in April. It revealed debts of £1.4 billion and a £415 million hole in its pension fund.
Phoenix bought Rover from BMW in 2000 for £10 in an attempt to keep mass car manufacturing going in the Midlands. But its role has come under scrutiny.
