MG Rover – Serious Fraud Office (SFO) to investigate

The saga that was MG Rover continues to rumble on, four years after the troubled car maker collapsed with the loss of 6,000 jobs, plus a further 9,000 in suppliers’ workforces

MG Rover was bought from BMW for the princely sum of £10 after BMW had had enough of trying to make a viable company out of a business that was still undermined by the woes – and attitudes – of the British Leyland years. That £10 purchase price also came with £425 million in loans from BMW, so MG Rover had a chance.

But the collapse, and the subsequent sale of the rights to the MG trademark to SAIC (Shanghai Automotive Industry Corporation), brought accusations that the ‘Phoenix Four’ – Directors and owners of MG Rover – has acted fraudulently when it was revealed they had acquired more than £40 million in pension rights, salary and assets in the intervening five years between purchase from BMW and collapse.

But an initial report by administrators exonerated the Phoenix Four from any fraud, but the Government decided to pursue the matter, and set up an enquiry to investigate. That enquiry reported last week that there was nothing to pursue (at a cost of £16 million – perhaps the SFO ought to look at that!), but that was obviously not the answer Lord ‘Mandy’ wanted, so he’s bringing in the SFO.

It’s obvious that the Phoenix Four did a far from exemplary job with MG Rover. But then BMW had failed to get round the institutionalised ineptness and inefficiency, so it shouldn’t really be a great surprise that Phoenix also failed. But ‘Mandy’ wants a scapegoat, so the Government is doing what it does with reports that don’t give the conclusion they want – have another enquiry. Bit like the European Referendum issue. If you don’t like the answer then keep asking variations on the question until you do get the answer you want.

Time to stop throwing good money after bad, and put the MG Rover debacle to bed.

Source: Sunday Times