BusinessBusiness RecoveryDTI accused of hastening Rover’s demise

DTI accused of hastening Rover's demise

Questions raised in parliament about timing of Rover collapse, with DTI accused of hastening its demise for political reasons

Trade and industry secretary Alan Johnson faces a barrage of Commons
questions fuelled by deep suspicions that his department engineered the collapse
of Rover early in the general election campaign to minimise electoral
embarrassment for Labour closer to polling day.

Link:
Deloitte could face tax probe
over MG Rover accounts

Shadow industry minister Charles Hendry and other Tory MPs raised the
astonishing behavior of the department and former secretary of state Patricia
Hewitt under Parliamentary privilege in a Commons debate, in which he demanded
how it came to announce Rover was going into receivership on 7 April.

He claimed that PricewaterhouseCoopers was called in to advise the company on
its situation, but an hour later she announced it had entered administration.

He demanded a detailed account of what happened during that hour to counter
suspicions ‘that it suited the Government’s purpose to bring forward the closure
of the company so that it happened in the early stages of the election campaign,
not in the middle or final stages’.

Earlier in the debate, Tory MP Julie Kirkbride said she agreed with the
allegation ‘bearing in mind the fact that the previous secretary of state
announced that the company would be going into receivership before the board had
even decided that it would’.

And in a swipe at the Phoenix consortium she said: ‘John Towers and his
fellow directors stand firmly in the dock accused of greed, asset stripping and
taking the company, the employees and the government for a ride.’

Lib Dem MP John Hemming said the inquiry into what went on ‘should find out
why the then secretary of state jumped the gun and undermined Rover’s
credibility.

Women and equality minister Meg Munn said it was the collapse of the deal
with the Chinese corporation SAIC that lead to Rover going into administration
on 7 April and the administrators being called in on 8 April.

She said: ‘That was inevitable and would have happened whether the secretary
of state had made that statement or not.’ She promised the DTI ‘will co-operate
fully’ with the inspectors’ inquiry.

Hendry said later there was sufficient confusion over what had gone on during
two crucial days for a detailed investigation into the actions of the
department.

He said: ‘We need to know who did what and when, and who spoke to whom in
detail – and I will be putting down a lot of formal questions in the Commons
about this. I think there are grounds for believing that the government did
bring forward the collapse of Rover because it suited their electoral
timetable.’

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