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
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
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.’
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