Speculation in Britain that the Serious Fraud Office is to investigate a case surrounding the collapse of MG Rover in 2005 has been confirmed today with a British Government enquiry recommending a criminal investigation.
Business Secretary Lord Mandelson will call in the SFO following completion of the enquiry.
The MG Rover Group hit the wall amid massive publicity nearly four years ago, owing creditors nearly £1.3 billion and saw around 6000 employees lose their jobs in addition to 9000 workers at dealers and support industries.
“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,” said Lord Mandelson. “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.
“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,” the four business men said in a statement. “Four years on, any suggestion of another further investigation is frankly ridiculous.”
The Government report cannot be published yet for legal reasons.