I don't think I was alone at being surprised that a minister should instigate an SFO investigation into the collapse of Rover. After all, BDO Stoy Hayward and a leading QC had been going over the books since 2005, apparently running up £16 million in costs. If there was something untoward, then they would have called in the cops. Only a cynic would have thought they would have delayed so they could max their billings.
But then why would it be left to the Business Secretary to put the call into the SFO? We can only speculate, but the Phoenix 4 think they know. They have accused Gordon Brown of "pulling the plug" on MG Rover in 2005 when he was chancellor of the exchequer, on the advice of Baroness Vadera, at the time a key Treasury adviser. Tony Blair wanted to save the company, the directors claim in a "dossier" issued by Media House, a public relations company.
The document reflects their concern over the fraud investigation into Rover which they bought from BMW for £10 in 2000. They say the SFO enquiry is designed to postpone publication of the investigators' report.
The Phoenix Four submitted 30 separate requests for information to the government about the handling of the company failure, which were all denied. The Department for Business told the media enquirers that disclosing the information could have "prejudiced" official investigations into the collapse.
The dossier implies that Lord Bhattacharryya discouraged the Treasury from supporting MG Rover during last-ditch rescue talks with Shanghai Automotive Industry Corporation (SAIC) in 2005. But the Labour peer and party donor says he was never himself a "key advisor" to government on MG Rover, but the collapse of MG Rover was triggered by advice from Rothschilds to ministers that discussions between MG Rover and SAIC had stalled, and the government withdrew a £120m bridging loan.
The dossier also counters press reports "based on erroneous and mischievous [government] press briefings" that the Phoenix Four extracted £40m from MG Rover. It says that the directors received £8.5m in salary and bonuses over five years and annual pension contributions were made of £730,000 each, or £14.6m in total. The four men received another £10m from a share sale.
3 comments:
Dear Alex,
Can you confirm how you got to £14.6m? (I am assuming that the Phoenix Four were indeed four people).
By basic maths 4 x £730k = £2.92m
plus £8.5m = £11.42m plus sale of shares netting £10m = the grand total of £21.42m
Rather a long way from the £40m those mendacious people at Labour were bandying about!
Yours,
Old Jock
£730k per year per person for 4 people for 5 years = £14.3 million in my book, plus the £8.5 million salary, which makes £22.8 million.
The £10 million they made from later share sales was not made from the company but from the purchasers of the shares. No doubt the government spin doctors talked abut "the maney they made out of the company" and included that money.
Nothing particlarly fraudulent about all that as I expect it was all reported in the annual accounts.
Dear Alex,
Thank you for taking the time to break down the payments. It's much appreciated.
Yours,
Old Jock
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