By Max Clarke
Four directors of the holding company running MG Rover during its £1.3 billion collapse in 2005 have been banned from directing companies by the Insolvency Service for a combined total of 19 years.
Since the publication of the independent report into the financial affairs of MG Rover and its associated companies, The Insolvency Service has been taking forward intended proceedings to disqualify the directors.
In line with the findings of the independent report, it was the position of The Insolvency Service that taken as a whole, the overall conduct of the Phoenix Four made them unfit to be company directors. The Service particularly highlighted the report’s findings in respect of the way the directors manipulated the assets and income streams through the use of companies in which they, rather than the creditors of MG Rover had an interest, allowing them to benefit through large salaries, dividends and profits.
MG Rover Group, the manufacturer of Rover and MG cars went into administration on April 8, 2005 owing creditors nearly £1.3 billion. The Secretary of State appointed Inspectors to investigate the affairs of MGRG, its parent company Phoenix Venture Holdings (PVH) and MGR Capital Limited between the purchase of MGRG from BMW in May 2000 and the date of it entering administration.
“These disqualification undertakings represent a successful conclusion to a lengthy and complex investigation into the collapse of MG Rover,” said Minister Edward Davey. “Peter Beale, John Towers, Nick Stephenson and John Edwards have each been banned from being involved in the management of any company for several years. The outcome of this case serves as an important reminder that unacceptable conduct by company directors can result in lengthy periods of disqualification.”