SFO backs off from MG Rover probe

Fraud watchdogs have backed off from starting an investigation into the sale of MG Rover after its collapse, one of the UK's biggest ever automotive administrations.

BDO Stoy Hayward was called in to investigate the corporate failure in 2005, which cost more than £14.8m over the course of the four-year probe.

The government was accused of kicking the issue into the long grass by referring the case to the Serious Fraud Office, and the investigators have announced this morning that no probe would be taking place.

The referral saw the publication of BDO Stoy Hayward's report put on ice. To compound the situation, the SFO has said it could not expand on why it had decided not to investigate because the report was still not in the public domain.

The SFO said: 'The Serious Fraud Office has announced that it does not intend to begin a criminal investigation into the sale of car manufacturer, MG Rover Group, following a review of documents sent by the Department of Business, Innovation and Skills.'

BDO's report was referred to the SFO on 6 July by Lord Mandelson the business secretary after he studied the findings.

Following the referral, a small team of SFO investigators studied the report and made recommendations to the SFO’s Director, Richard Alderman.

He read the recommendations, read the report itself and took advice from the SFO General Counsel, Vivian Robinson, QC, and an external opinion also from eminent lawyer, Clare Montgomery QC.

'The Director then made the decision not to initiate a criminal investigation,' the SFO said.

'As the inspectors’ report has not been made public, the SFO is unable to go into
detail about the reasons for its decision.'

Further reading:

MG Rover report prompts SFO investigation

Small payout for MG Rover creditors