SFO to probe MG Rover collapse
The circumstances leading to the collapse of MG Rover, the Midlands carmaker, are to be investigated by the Serious Fraud Office.
The new probe follows the completion of a four-year enquiry under section 432 of the Company's Act by inspectors appointed by the Department for Business.
The Business Secretary, Peter Mandelson, will make a brief written statement tomorrow confirming that the SFO has decided to take the case.
The involvement of the SFO means that publication of the report by the Business Department inspectors will be delayed pending a decision on whether there will be criminal prosecutions.
MG Rover went into administration under insolvency procedures in April 2005, with debts greater than £1bn. More than 6000 employees lost their jobs and suppliers to the company were also badly hurt.
A quartet of executives known as the Phoenix Four took control of the company in May 2000.
John Towers, Nick Stephenson, Peter Beale and John Edwards are estimated to have taken out more than £40m in pay and pensions in the years before the business went down.
They originally bought MG Rover for a nominal £10. The business came with an interest-free loan of £427m from BMW, the previous owner.
There are likely to be questions raised about why the case has been referred to the SFO only after completion of the inspectors' enquiry, rather than bringing in police at an earlier stage.
A spokesman for the Phoenix Four said: "There has never been any suggestion of improper conduct by the directors and this was confirmed in a report by the administrators PWC six months after they took over the running of the company."