Former Rover MG Directors to Be Declared Unfit

With the investigation into the collapse of former British manufacturer MG Rover Group almost complete, private investigators published their report on Friday. In addition, UK’s business secretary Lord Mandelson has forwarded the report to the Financial Reporting Council, asking for the body to ban the company’s former directors from ever holding a corporate office again.

"This has been a painstaking enquiry by independent inspectors. It was important to get all the facts into the open so that workers who lost their jobs and creditors who were not paid know the truth,” Mandelson said in a statement quoted by just-auto.com.

"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.”

The directors are being accused, among other things, they received, each, 250,000 pounds a year as a salary and an additional 500,000 pounds as bonuses. Five MG Rover directors received, in a five year time frame, no less than 42 million pounds.

"During the five year period, the members of the Phoenix Consortium and [chief executive Kevin Howe] obtained large, and we say unreasonably large, financial rewards, totalling tens of millions of pounds. They also undertook a number of transactions to allocate assets to companies in the group other than MGRG and in which MGRG had no interest," the investigators’ report says.

MG Rover filed for protection in April 2005, with a total debt of 1.3 billion pounds. 6,000 people lost their jobs, while the company’s assets were sent to China, in the hands of Najing Auto.