LONDON (ShareCast) - The Serious Fraud Office (SFO) is to launch an investigation into the collapse of Birmingham carmaker MG Rover four years ago.
Following a long inquiry into the company's demise, Business Secretary Lord Mandelson
has decided to get the SFO involved.
"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," Mandelson said in a written statement Monday. "The SFO must now see if there are grounds for prosecution."
The closure of the Longbridge plant in Birmingham when Rover went into administration in 2005 cost 6,000 jobs, with thousands more lost at suppliers and dealerships.
In the spotlight are the so-called Phoenix Four, directors of Phoenix Ventures which bought MG from BMW (Xetra: 519000 - news) in 2000 for a nominal £10m.
John Towers, Nick Stephenson, Peter Beale and John Edwards are thought to have received more than £40m in pay and pensions in the lead up to Rover's failure.
MG Rover, which went under with debts totalling over £1bn, had come with a £427m interest-free loan.
The behaviour of the four directors prompted the Department for Trade and Industry (DTI (DTIC.PK - news) ), now the Department for Business, to launch of an inquiry. It had bee expected to last no more than 18 months.
"Four years and £16m of taxpayers' money has been swallowed up on this inquiry, and the directors' major concern is that it will fail to get to the heart of the matter, which is why the Government withdrew its offer of a loan to the company at the 11th hour, allowing 6,000 workers to lose their jobs," said a spokesperson for the men.
"Four years on, any suggestion of another further investigation is frankly ridiculous and smacks of kicking this issue into the long grass."
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