THE Serious Fraud Office (SFO) has said it does not intend to launch a criminal investigation into the collapse of carmaker MG Rover.
It was collapsed in 2005 with the loss of 6,500 jobs. Many of the workers are still unemployed to this day.
The four executives in control of MG Rover, termed the Phoenix Four – John Towers, Nick Stephenson, Peter Beale and John Edwards – bought the company for £10. They also gained an interest-free loan of £427m from BMW. They took an estimated £40m in pay and pensions from the company, and when the company collapsed in April 2005 it had debts of more than £1bn.
It is alleged that the Phoenix Four had restructured MG Rover so that it was kept separate from various profitable operations, all owned by Phoenix Venture Holdings (PVH). Analysis of Rover’s accounts after it collapsed allegedly showed a £554m gap between identified cash inflows and traceable cash outflows.
The SFO inspectors’ ‘no crime’ report is due on September 11. However there were definitely political criminals at work at MG Rover.
They came into full play when the plant folded on April 7th 2005 just four weeks before the May 5th general election.
The Labour government advanced the company a pittance to get it over the ‘difficult period’ of the election and then, with the utmost cynicism, allowed the company, with 6,500 jobs, to go to the wall.
The political criminals of the trade union bureaucracy allowed them to do this and helped them.
Both the then TGWU leader, Woodley, and the leader of the Amicus union, Simpson, refused to demand that the plant be nationalised to save the 6,500 jobs.
The Labour government offered the Shanghai Automotive Industry Corporation (SAIC) a bridging loan of £100 million for a year to take over the plant, while SAIC wanted a two-year guarantee of MG Rover’s solvency.
Labour withdrew its offer on April 7th 2005 and Woodley and Simpson put their signature alongside Trade and Industry Secretary Patricia Hewitt’s, justifying that action.
MG Rover assets were sold to Nanjing Automobile in 2006 and the plant was removed to China.
On April 7th 2005, Woodley and Simpson made a ‘joint declaration’ with Hewitt. This revealed that they had agreed with the government not to give the guarantee, and that the company should close.
Hewitt read out the statement, saying: ‘Tonight MG Rover has announced that their board has decided to call in the receivers.
‘This is a devastating blow to all those involved – the workers and their families, the company’s suppliers and the wider community. Tonight our thoughts are with them.
‘Everyone recognised that a partnership with SAIC was critical to MGR’s future. That is why MGR, the government and the trade unions have been working tirelessly round the clock to secure this deal.
‘In the end, SAIC made it clear that they were not confident about the future solvency of MG Rover, and therefore there was no reasonable prospect of a deal.
‘The government stood ready to issue bridging finance of over £100m to help, but without a deal there was no possibility of a bridging loan. SAIC, for their part, indicated that bridging loan finance would not have solved their concerns.
‘All parties have agreed that we must now give our full support to the workers and their families and the suppliers and communities affected. The government and unions will now work with the administrator and all concerned to try to secure future car manufacturing at Longbridge.’
What they did in 2005 to MG Rover they will do to Vauxhall Ellesmere Port and GMM Luton today.
Workers must get ready to occupy the GM plants in the UK and demand their nationalisation.
