The Department of Business Innovation and Skills has ruled that the former directors of MG Rover will be banned from holding any company office in the UK for three to six years.
The so called Phoenix Four, the group of directors who oversaw the disastrous collapse of British automotive manufacturer MG Rover, have been disqualified from holding executive positions in the UK for a period of three to six years.
The valued British brand collapsed in 2005 with the loss of 6000 jobs but the decision to ban the directors from leading other companies in the UK was only announced yesterday by the Department for Innovation Business and Skills.
The ongoing saga of MG Rover’s liquidation has been a headache to government, creditors and ex-employees for more than half a decade. The debts, in excess of £1.3bn. are still to be fully accounted for and many employees whose pensions and livelihoods were disrupted are still to receive pay-outs. Liquidators say they expect payments to continue being assessed well into 2012 and the feeling from those who have lost out on career security is one of resentment and injustice. One ex-employee commented to the BBC: “It is totally unjust we have been waiting for so long. People have suffered hardship.”
The former directors of Rover have denied any wrongdoing either in the run-up to the company’s collapse, or in its aftermath and are said to have voluntarily agreed to the ban. Controversy still reigns over the actions of the four directors – Peter Beale, Nick Stephenson, John Edwards and John Towers – however, who have managed to trouser $42m in pensions and benefits over the past five years while lesser employees have been left to flounder.
Furthermore, the ‘Phoenix Four’ are yet to make good on their promise to establish a trust fund for former employees or to deliver a public apology to them as was requested by Lord Mandelson during his time in office as Business Secretary.
The disqualification ruling for the MG Rover directors bans them from holding company office in the UK, but not oversees, and will be seen by many as a paltry reprimand in comparison to the charges raised against them by an independent enquiry in 2009 that they enriched themselves at the expense of the company.
Charles Morgan, MD of Morgan Motors, the last British owned commercial car manufacturer commented to TM: “The collapse of Rover was a real loss to the UK automotive industry. We used to use them to supply our four cylinder and V8 engines, meaning that we fitted a British engine in a British car. Now we use BMW. There is simply no alternative.”
Looking back on the actions of the four directors prior to the liquidation of MG Rover, Mr Morgan, who is also a member of the Automotive Council UK, reflected: “There wasn’t any sort of consistency to the strategy they implemented when they took over and they continued to allow the losses in existence before they joined – I believe to the tune of £200m a year. The strategy was very poorly executed.”