Industry News
Mandelson’s legal action halts MG Rover inquiry
25th Febuary 2010
A parliamentary investigation into the businessmen who oversaw the collapse of MG Rover has been called off after it emerged that Lord Mandelson is close to commencing legal proceedings to have them banned from being company directors.
The Business Innovation and Skills select committee, which scrutinises Lord Mandelson’s department, which had intended to open the inquiry into MG Rover, will instead turn its attention to an investigation into the Business Secretary’s handling of the Kraft takeover of Cadbury.
The committee had planned on calling the so-called Phoenix four, who ran MG Rover for five years up to 2005 to parliamentary hearings next month.
However, Peter Luff, the Conservative MP who chairs the committee, said the evidence session had been postponed after hearing of the Business Secretary’s planned proceedings.
Mr Luff said: “We decided that in light of the fact that court proceedings appear likely, it would not be right for us to proceed with the evidence session. However, this is a postponement, not a cancellation. Should proceedings not go ahead we will call in the four directors at the earliest opportunity. We also reserve the right to call them to give evidence once any legal proceedings have concluded.”
It is understood that a legal case against the four — John Towers, Nick Stephenson, Peter Beale and John Edwards — is now closer after Lord Mandelson’s officials received legal representations from the men, who were directors of Phoenix Venture Holdings, the company that took over MG Rover for £10 in 2000.
A Government report last year was harshly critical of the Phoenix Four who along with Kevin Howe, the chief executive of MG Rover, received £42 million in the five years before the Midlands motor company went into administration.
After the Serious Fraud Office said it would not be pursuing charges against the directors, Lord Mandelson pledged to bring a case to bar them from acting as company directors.
Having parked the MG Rover inquiry, Mr Luff said the BIS committee would instead be taking evidence on March 16 on the Kraft takeover of Cadbury.
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