MG Rover report sparks fevered speculation

The government, the insolvency profession and trade unions are on tenterhooks before BDO Stoy Hayward’s report into the collapse of MG Rover is released on 11 September.

What’s contained in the 850-page tome has been the subject of feverish speculation, but after the Serious Fraud Office ruled out a criminal probe into the affair, is there anything much of substance to look forward to?

The most drastic punishment the so-called Phoenix Four top brass may face is a ban from holding directorships.

This follows BDO taking four years to drill down into the chain of events leading up to the collapse of the once great car maker, making it the third firm to be involved with MG Rover before during and after its failure.

Deloitte was the auditor and adviser to the parent company Phoenix Venture Holdings and is currently the subject of an AADB probe.

PricewaterhouseCoopers was called in to handle the administration when the Birmingham based car maker could no longer carry on trading, laying off 5,000 staff.

Whitehall mandarins will finally release the report next month but it has been a real political hot potato.

The government was accused of kicking the issue into the long grass by referring the MG Rover case to the SFO and, when the fraud watchdogs pulled back from launching a criminal investigation, no reasoning could be given because BDO’s report was confidential.

In the wake of increasing public frustration, business secretary Lord Mandelson decided that the report would finally be released.

Even after a four year wait, red tape still means there is some lead time before the report goes public.

‘An established process must be adhered to’ according to the business department last week.

Copies of the report will be given four days in advance to those named on its pages‘ who, it is considered, need time to prepare themselves for publication,’ the business department added.

Ultimately there may not be that much in the report to beat the directors with, but the risk of reputational damage in being connected with MG Rover has already seen Deloitte taking steps to defend itself.

The firm said last week: ‘We have not yet seen the inspectors’ report and so cannot comment upon its contents. However, we would be disappointed if the Inspectors criticize our work or our people.

‘We consider that we performed our work entirely competently and professionally throughout and we are confident that the AADB investigation, with which we are fully cooperating, will demonstrate that our people acted appropriately and did not fall below the standards to be expected of them.’