The report into the spectaular 2005 demise of MG Rover will be published this Friday 11th September. The Serious fraud office will not be pursuing the former directors of the company - dubbed the Phoenix Four nor will any action be taken in the light of alleged misconduct by the UK Government over funding.

It does appear that the report will highlight a range of examples of bad business practices by the 'Phoenix Four'

An article in the Sunday Telegraph says "the report makes uncomfortable reading for the Government – especially over what happened to a £100 million bridging loan designed to rescue MG Rover – but suggests that Labour did try to save the carmaker and there was no deliberate plan to pull the plug on the business."

The 850-page report, which has generated a taxpayers' bill of over £16 million and was four years in the making, contains details of complex financial transactions and analysis by forensic accountants but astonishingly, has not found hard enough evidence to prosecute anyone .

However, the Sunday Telegraph suggests that Business Secretary Lord Mandelson may be consulting lawyers about banning the Phoenix Four, John Towers, Nick Stephenson, Peter Beale and John Edwards, who bought MG Rover in 2000, from being company directors.

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It has emerged that the former owners of collapsed manufacturer, MG Rover have rounded on the UK Government over apparently refusing financial aid to save the company.

Towers, Edwards, Beale and Stephenson stand accused of asset-stripping to the tune of tens of millions of pounds drawn from the car company in salaries over the five years before it went into receivership, have drawn up a sizeable report also claiming that the Prime Minister at the time Tony Blair, was keen to save MG Rover.

The authors, however report that a £120 million loan to the company was blocked in April 2005 by Gordon Brown, the Chancellor at the time.

The former bosses claim that the company collapsed as a direct result of this action.

All of this follows news that the current Business Secretary, Lord Mandelson intends to hand the case over to the Serious Fraud Office with the intent of initiating a criminal investigation into the asset stripping.

The report seems to directly accuse the Government of wanting to 'cover up' its involvement in the demise of the company: “The Government is doing and will do anything to disguise the role played by senior political figures in the closure of MG Rover.” and suggests that MG Rover was failed at a time when millions of pounds worth of public money was given to "rival foreign manufacturers such as Ford, Nissan, BMW, Vauxhall and Peugeot”.

Allegations that Mr Brown pulled the plug on MG Rover have already been strenuously denied by the UK Government.



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Speculation that the Serious Fraud Office is to investigate a case surrounding the collapse of MG Rover in 2005 has been confirmed today (6th July 2009). A Government inquiry has recommended a criminal investigation.

Business Secretary Lord Mandelson will call in the SFO following completion of the inquiry. The MG Rover Group hit the wall amid massive publicity nearly four years ago, owing creditors nearly £1.3 billion. and saw around 6,000 employees lose their jobs in addition to 9,000 workers at dealers and support industries.

Lord 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.”

Four businessmen - John Towers, Peter Beale, John Edwards and Nick Stephenson - bought MG Rover from BMW for £10 in 2000. It is thought that the SFO investigation will centre on the four paying themselves more than £40 million in salaries and pensions and whether this amounts to illegal asset stripping.

In a statement the four businessmen were quoted as saying: “There has never been any suggestion of improper conduct by the directors and this was confirmed in a report by the administrators six months after they took over the running of the company. Four years on, any suggestion of another further investigation is frankly ridiculous.”

The Government report cannot be published yet for legal reasons.