... Barclays approached Deloitte with "Project Aircraft", a scheme where MG Rover would acquire the share capital of a company leasing two Boeing 767 aircraft. The idea was that the car company's losses would be used to eliminate the leasing company's tax liabilities. This time, the scheme went ahead, with the Phoenix Four's holding company earning £10.6m from the arrangement. Much of this money was paid into the Guernsey Trust, an offshore account used mostly to fund the pension schemes of the Phoenix Four and Kevin Howe.

The Phoenix Four started out with plans to pocket a total of £75m over five years. They still own £11.6m of assets.

But the Serious Fraud Office, which examined the report last month, decided that it did not reveal enough evidence to justify criminal proceedings against the Four. The only likely sanction they face is being disqualified as company directors ...

Guardian  11 September 2009

The executives who were running carmaker MG Rover when it collapsed received "unreasonably large" payments, an independent report into the carmaker's collapse has said.

The 830-page report took four years to produce and has cost about £16m ...

The report says the financial rewards obtained by the five executives running Rover when it collapsed were "unreasonably large" ...

REMUNERATION
Mr Beale £8.981m
Mr Edwards £9.024m
Mr Stephenson £8.976m
Mr Towers £8.958m
Mr Howe £5.708m

The government comes off relatively lightly in the report ... However, the government is criticised for briefing the press on the negotiations before updating Rover.

"Although we consider that it was irresponsible to tell the press that the talks with SAIC had 'stalled' without consulting, or even informing, the group, we have no doubt that (Rover) would have gone into administration in April 2005 in any case ... "

Nick Stephenson, one of the Phoenix Four, paid almost £1.7m to a consultant, identified as Dr Li, with whom he had a "personal relationship" ...

The report criticises Mr Beale, the finance director of Phoenix Holdings, for buying computer software that deep cleans a computer's hard disk of any "sensitive material" that normal efforts to delete would not remove ...

The so-called Phoenix Four, plus chief executive Kevin Howe, described the report as a "witchhunt" and a "whitewash for the government".

"Our remuneration was not the reason for the collapse. The real reason is the government bungled the last chance to save MG Rover,"

... an investigation by the Accountancy and Actuarial Discipline Board into Deloitte's conduct will continue.

BBC NEWS  11 September 2009

The Rover debacle ... sheer cowardice

Phoenix Four face heavy criticism in report into MG Rover's collapse

Rover bosses attacked over payout

The lobbyists and public relations team working for the Phoenix four have tried to steer the debate about what went wrong at MG Rover to the crucial few days before the expected joint venture with the Chinese collapsed.

They have pressed the argument that it was the government's failure to support the joint venture that led to the collapse of Britain's last volume car manufacturer. But the government inspectors' investigation has taken a much broader timeframe ...

The question as to where the money went remains as mysterious now as then. MG Rover underwent an extremely complex corporate restructuring. Whether it was the intention to leave MG Rover the car company ringfenced as a standalone business is unclear, but that was the effect.

Little by little, the support businesses were moved around the group to the point where MG Rover was something akin to a loss-making brand name ...

Guardian  11 August 2009

No criminal inquiry into the men who made fortunes from MG Rover

Serious Fraud Office exerts independence

MG Rover collapse: The Phoenix Four

The Phoenix Four business executives who bought MG Rover from BMW in 2000 have received a further £3.5m in dividends and share payments in the four years since its collapse.

The cash has come from their investment in MGR Capital, a car finance joint venture with a subsidiary of banking group HBOS, now part of Lloyds TSB.

MGR Capital, which bought the Rover cars finance and lease loan book from BMW for £313m in 2001, was wound up last year. The Phoenix Four could also be entitled to a further windfall of £12m from the assets from the wind-up according to company accounts, although their spokesman disputed this figure ...

At the time of the Rover collapse, the Phoenix Four pledged to put any of the assets and funds recovered into a trust to benefit employees ...

Observer 12 July 2009

The Serious Fraud Office is to investigate the circumstances surrounding the demise of Birmingham-based carmaker MG Rover in 2005.

Business Secretary Lord Mandelson will issue a brief written statement to Parliament later confirming the move.

It follows a four-year inquiry into the collapse, which led to 6,000 job cuts.

The four executives in control of MG Rover at the time said there was "no suggestion of improper conduct", calling an investigation "ridiculous".

A spokesman for the MG Rover directors said: "The directors have at all times willingly accounted for their actions, which kept MG Rover alive for five years."

When the MG plant at Longbridge, Birmingham, closed the government announced a £150m support package for those losing their jobs and for the estimated 12,500 people affected in subsidiary firms.

The new investigation comes after the completion of a four-year inquiry under section 432 of the Companies Act by inspectors appointed by the Department for Business, Innovation and Skills.



Part of that investigation was supposed to find out what had happened to the more than £400m left to Phoenix Ventures when it took over MG Rover from BMW in 2000.

BBC NEWS 06 July 2009

MG Rover demise report completed

Rover probe has cost £15m so far

Ex-Rover workers 'earning less'

Rover collapse 'to cost UK £600m'

MPs to probe government on Rover

The year when MG Rover collapsed

Most of the 6,300 workers laid off with the collapse of MG Rover in 2005 had to take substantial pay cuts when they found new jobs, research suggests.

The Work Foundation and Birmingham Business School found that 90% of 200 people questioned were in some form of employment by April this year.

But two thirds were earning less, with the cuts averaging £5,640 a year.

The BBC's Martin Shankleman says the report could offer lessons for policy-makers amid rising unemployment.

About one third of the workers had found new roles in manufacturing and were earning roughly the same as they had at MG Rover's Longbridge plant in Birmingham.

But of the 60% who had moved to the service sector, most had suffered a pay cut - this averaged over £6,000 a year across retail, education, health and social work.

Almost one in four of the 200 interviewees said they were now in debt or drawing on savings.

The Work Foundation senior researcher Michelle Mahdon said: "The jobs at Rover were high quality manufacturing jobs paying above the average for the West Midlands region so it was always likely that workers would not be able to find directly comparable work."

She added: "But judged against national levels, it does appear that the ex-Rover workers are now in jobs with slightly lower levels of autonomy, challenge and skill use, and fewer opportunities for progression than other workers in the UK."

While almost half of those studied said their job was worse then their role at Rover, a quarter claimed they had found a better position. ...

BBC NEWS 13 November 2008

No pension rescue for ex-Rover workers

THOUSANDS of former MG Rover workers face losing their pension because the carmaker’s main retirement plan does not qualify for a government rescue scheme.

Pension trustees have written to 6,500 people warning them that the main MG Rover Group fund and another plan for about 100 senior managers are “not currently eligible” to be assessed for the Pension Protection Fund (PPF). The pension scheme has an estimated shortfall of about £400 million. The £17 million trust for the Phoenix Four directors and their families is unaffected.

The uncertainty over the pensions of MG Rover’s former staff comes as it is thought that the independent trustees could be taking legal action against Phoenix Venture Holdings (PVH), the parent company, which is still trading. The pension plans for the workforce and managers have failed to meet the PPF’s criteria for state help because they are multi-employer schemes, which are not entitled to help unless all related companies are in administration. All MG Rover’s main subsidiaries are in administration except PVH which still holds assets, including a stately home.

Independent Trustee Services, which was appointed in April to manage the funds, told pension members: “It remains ITS’s objective for the scheme to enter the PPF in order that the majority of members can benefit from the compensation that the PPF provides. For legal reasons, ITS cannot currently comment on the likelihood and/or timing of entry to the PPF assessment period.”

If legal action is taken to make PVH assume responsibility for the pension scheme, it could collapse into administration and a fresh approach could be made to the PPF. But it is believed that PVH is resisting such attempts. It said: “For legal reasons, we are not going to comment on this.”

MG Rover has only about 200 pensioners because when BMW sold the business to the Phoenix consortium five years ago it picked up all outstanding pension liabilities. But along with the 6,100 people who were employed by the group, there are about 400 who have since left the company but are entitled to pension provision.

The four founding directors, led by John Towers, and the chief executive, Kevin Howe, caused huge controversy when they set up a separate pension trust for themselves into which has been paid at least £17 million.

Martin Sheppard, 38, who joined the Rover pension scheme 16 years ago, said: “This is the icing on the cake; no job, not much of a redundancy package, it’s the final insult.”

The T & G union, which represents MG Rover workers, said that officials are optimistic that a solution would be found. “The detailed situation is complex, but the T & G is confident that people will receive their pensions,” it said.

Christine Buckley, Industrial Editor, The Times, May 2005

Rover 'dumped' thousands of cars on dealers

MG Rover was boosting its cash flow artificially in the 10 months before it collapsed by dumping unordered cars worth an estimated £40m on its dealer network.

Alan Pulham, the director if the National Franchise Association, part of the Retil Motor Industry Federation, said: "Over the past few months cars were shipped to dealers in excess of the orders the dealers had placed and without the necessary normal dealer authorities."

He added: "We are probably talking about between 3,000 and 4,000 vehicles. If you took an average value of say £13,000, you're probably talking about more than £40m."

Auto industry executives believe that al,ost all the UK's 260 MG Rover dealers were affected ... "

...

The practice, which is not thought to be illegal, had the effect of flattering the manufacturer's profits at a time when it was deperately attempting to remain solvent in order to sell itself to Shanghai Industry Automotive Corporation. Pulham said that the way MG Rover operated allowed it allocate cars to dealers via a financial intermediary, Capital Bank, a subsidiary of HBOS.

Capital would pay MG Rover for the cars and charge the dealers interest until they sold the vehicle to a customer, at which point the dealer would pay off the outstanding finance on the car.

Robert Peston, The Sunday Telegraph Business, 24 April 2005

Hewitt's Rover inquiry may lack bite, insiders warn

The Government has ordered an independent inquiry into the accounts of MG Rover, turning up the pressure on the four directors and the company's auditor Deloitte amid allegations of a £400m "black hole" in the group's accounts.

But some experts questioned whether the inquiry - ordered by Patricia Hewitt, the Secretary of State for Trade and Industry - has the power and remit to be able to investigate fully the reasons behind the car maker's collapse.

Sir Bryan Nicholson, the chairman of the Financial Reporting Council, will lead an inquiry into the accounts of Rover and all companies associated with it, including Phoenix Venture Holdings, the parent company. The investigation will go back five years to the point at which four businessmen, led by John Towers, bought Rover from BMW for a token £10. The inquiry will look at how Phoenix has used £450m left to it by BMW and follow the money trail. It will also examine whether Rover was trading while insolvent.

Reports have suggested the company owes some £1bn to creditors, including up to £100m to HBOS, the bank which provided the financing to keep the car production line rolling. There is widespread anger over the £40m taken out of the company by Mr Towers and his fellow directors in pay and pensions.

Industry sources questioned why a formal DTI inquiry had not been instigated under the Companies Act. This would have far greater powers to examine Rover's performance, gather information under oath and more easily investigate offshore entities. One senior financier said: "The Financial Reporting Council doesn't lack teeth altogether but it has a pretty feeble set of gnashers. Still, I guess it will be quick, relative to a DTI investigation, which would proceed at about the pace of the 'Bloody Sunday' inquiry."

Sir Bryan said he expected to make initial findings within a fortnight. But he warned against rushing to instant judgements. "It's very important regulation is carried out properly and by the book," he said.

The Government has been keen to pin the blame for the Rover collapse, and the 5,000 job losses that have resulted, firmly on the four Phoenix directors.

Yesterday Mr Towers denied he and the other directors had been excessively paid. He said: "Other bosses are paid a lot more than I was and are given larger pensions. It is very easy to get consumed by the character assassination stuff."

Saeed Shah, The Independent,18 April 2005

Rover inquiry calls for new watchdog

Sir Bryan Nicholson, chairman of the Financial Reporting Council, yesterday said that an accounting watchdog for private companies should be set up in the wake of the scandal at MG Rover, in which four men were able to buy the business for £10 and pay themselves tens of millions of pounds.

The news came as John Towers, MG Rover's chairman, denied that £400m was unaccounted for in the company's books. He said: "Some of the calculations I have seen do not even include closing stock and assets figures. This is a simple issue of addition and subtraction that even a child of seven could cope with."

Sir Bryan was asked to lead an investigation into the finances of MG Rover and its parent company Phoenix Venture Holdings by Patricia Hewitt, trade and industry secretary, on Friday night. The review will be carried out by the Financial Reporting Review Panel (FRRP), which is chaired by former City lawyer Bill Knight.

Asked why the FRRP was only starting its probe after months of reports raising concerns about MG Rover's financial health, Sir Bryan admitted that the FRRP was probably too focused on listed companies.

He said: "Legitimate questions will emerge as to how you make certain that the standards of corporate reporting are good across the board. The FRRP tends to look at listed companies. Perhaps some of that focus needs to be rebalanced but we need to be careful that it does not inhibit the entrepreneurial process."

Christopher Hope, Business Correspondent, The Daily Telegraph, 18 April 2005

DTI paid £6.5m after warnings that Rover deal was non-starter

Officials trying to save MG Rover were warned three times in writing that there was little chance of a deal to save the stricken company yet ministers still sanctioned a £6.5 million loan, it was disclosed last night.

Before the loan was released the Department of Trade and Industry unsuccessfully tried to revive the deal, but according to a City source, an official from the Shanghai Automotive Industry Corporation replied "what part of 'no' do you not understand?".

The Chinese position was set out in a series of letters to the DTI, seen by The Telegraph. Opposition parties called last night for a wider investigation of ministers' conduct before the collapse of the Birmingham car maker, which laid off 5,000 workers last Friday.

The letters show that the DTI was made aware almost two weeks before sanctioning the loan that any deal to rescue MG Rover was remote. The loan was approved to let Price Waterhouse Coopers, MG Rover's administrator, pay the wages for a week.

On March 29, Hu Mao Yuan, SAIC's chairman, wrote to Mark Russell, the director of the DTI industrial development unit, to say there were serious worries about the solvency of MG Rover.

He said: "We have come to the conclusion that we do not have a sufficient level of comfort of [MG Rover] remaining solvent for a sustained period following completion of the transactions and it would therefore be imprudent of us to proceed on a presumption of an ongoing solvency."

In a further letter to Mr Russell on April 4, Chen Hong, SAIC's president, warned that MG Rover would be "solely reliant" on selling parts of the business and a proposed £110 million DTI "bridging loan" to stay in business after the deal was done.

He said it was clear that MG Rover "will be in difficult financial state post completion and that it will be solely reliant on bridge finance and asset sales. . . in order to remain solvent throughout the remainder of 2005 and much of 2006. As a result we are not confident in the ongoing solvency of [MG Rover] post completion."

Mr Hong said the joint venture it had planned with MG Rover, in which SAIC would own a 75 per cent stake, was in serious doubt. "SAIC will not form a joint venture when it perceives a strong risk that [the joint venture] may not survive as a result of [MG Rover's] insolvency." A third letter on April 5 from Mr Hong also expressed concerns.

MG Rover collapsed on April 8. Two days later the Government announced it was making a £6.5 million loan to cover a week's wages and "give the administrator a breathing space to carry on looking for purchasers".

A final letter from Mr Hong, this time to Patricia Hewitt, the Trade and Industry Secretary, last Friday sealed MG Rover's fate. It stressed that "we are not willing to acquire either the whole or parts of MG Rover or Powertrain businesses on a going concern basis out of administration". About 5,000 of the 6,100 workforce lost their jobs that day.

Christopher Hope, Business Correspondent, The Daily Telegraph, 18 April 2005

The Stripping of Rover

"Deloitte was well rewarded ... in 2002 and 2003, the auditors were paid £0.5m each year for audit work and a total of £2.5m for 'other services'.

A further £1.1m was paid ... 'in connection with the acquisition of Pheonix Venture Leasing 2 Limited'.

So what were all those other services? A Deloitte spokesman says: 'They were corporate finance advice and due diligence work on the purchase of assets'.

On October 29 last year, Deloitte described MG Rover as a going concern. Less than six months later PriceWaterhouseCoopers (PCW), the professional services group that has been appointed administrator of the collapsed company, says it has identified outstanding debts of around £1bn and little in the way of realisable assets to cover those debts.

'We are satisfied with the opinions we gave relating to the financial statements,' says a Deloitte spokeman. 'We are not concerned. We believe our opinions were the right ones.'

...

A summary of the accounts of PVH (Phoenix Venture Holdings) ... shows that the directors ... took more than £37m out of the company in pay, pensions and loans over five years.

Since being acquired by the Pheonix Four, MG Rover has undergone a highly complex restructuring that has seen the group split into a web of inter-connected companies.

...

In 2003, for example, the consolidated accounts for the whole group show net liabilities of £224.5m, while the PVH accounts ... show shareholders funds of £39.7m. In 2002, when the group as a whole had a deficit of £154m, PVH was sitting on £20.9m of net assets, up from £10.8m the year before.

So how have the Pheonix Four achieved this startling growth in the value of their company while the group as a whole was haemorrhaging?

The company at the centre of the web is Techtronic. It is run by the Pheonix Four but owned by their holding vehicle PVH. The reason it occupies a central place in the story is that, according to its accounts for 2003, the latest available, it owns the entire share capital of MG Rover Group.

It is also the company that holds the £427m loan granted by BMW on handover. A note to the PVH accounts says that the BMW loan is interest free and is not repayable until 2049.

...

PVH's accounts show payments to directors of £15m in 2002, and £5.7m in 2003, with the highest paid directors earning more than the directors of its highly successful former owner, BMW.

Edward Simpkins and Tom Lane, The Sunday Telegraph, 17 April 2005

Deloitte cannot walk away from the Rover crash

When Deloitte says that its auditing of MG Rover and associated companies broke no rules, it is missing the point.

The international accountancy firm gave cover and respectability to a quartet of chancers who pocketed tens of millions of pounds while accelerating the destruction of a business employing thousands.

Its partners should be ashamed of the merciless stripping and skinning of an ailing company that took place on their watch.

They should distribute every penny of the millions they made in fees to the employees and local businesses who are the victims of their lamentably poor judgement.

Robert Preston, City Editor, The Sunday Telegraph, 17 April 2005

'Morally bankrupt' Phoenix Four stand to make millions more from the wreckage of MG Rover

The four directors at the centre of the MG Rover collapse could walk away from the wreckage of Britain's last big independent car manufacturer with millions of pounds of extra cash, The Independent on Sunday can reveal.

Amid mounting anger last night among more than 5,000 workers facing redundancy, it emerged that the so-called "Phoenix Four" directors, led by John Towers, are the biggest creditors to MG Rover. This means that the directors, who have already made about £40m from the company after buying it for £10 each, will have the largest claim to any proceeds raised from the sale of the carmaker's assets, PricewaterhouseCoopers, the administrator, confirmed.

Tim Webb and Clayton Hirst, The Independent, 17 April 2005

Rover owners lose two-year warranty

MG Rover walked away from its new-car warranty responsibilities last night, leaving up to 150,000 owners to pay for any problems with their cars.

Rob Hunt, of the MG Rover administrator, explained in a statement that "the company no longer has sufficient funds to reimburse warranties".

He said three-year warranties "continue in the first instance to be a matter between dealers and their customers". But he suggested that they might consider buying another warranty from "an alternative provider".

Normally, warranty work would be performed free by MG Rover dealers and the bill would subsequently be paid by the company, which underwrites the first two years. The third year's warranty is dealer-backed mechanical breakdown insurance cover, arranged through a third-party specialist.

Some 150,000 drivers who bought cars in the past two years are affected.

Although MG Rover has not had a particularly high level of warranty claims, it has liabilities of up to £300 million to its trade creditors.

Any outstanding warranty bills are therefore "simply another liability, along with all the others", said one MG Rover source, "and there isn't any cash to cover these bills".

Richard Cort, the chairman of the MG Rover dealer council which represents 264 dealerships, said: "I'm very disappointed, but I think the show must go on.

"You've got to remember that, on average, every dealer is owed £100,000 in unpaid warranty payments and sales allowances. I'd like to hold the dealer network together and make sure our customers are looked after with a third-party warranty that is as cost-effective as possible."

...

Tony Blair said "we just have to do whatever we can to help" save production. But City sources said the possibility of a life-saving takeover deal by China's Shanghai Automotive were remote.

Andrew English and Christopher Hope,
The Daily Telegraph, 13 April 2005

The 'Phoenix Four' will be investigated over collapse of MG Rover, says Brown

MG Rover's management are to be officially investigated after bringing Britain's last remaining large-scale car manufacturer to the brink of collapse, Gordon Brown said yesterday.

The Chancellor's comments were the first clear sign that the Government will launch inquiries into the so-called "Phoenix Four" executives - led by John Towers, the chairman - who have paid themselves £30 million since buying Rover from BMW for a token £10 five years ago.

Administrators have been called into the company, which employs 6,000 people, following the collapse of talks with its potential Chinese rescuers, the Shanghai Automotive Industry Corporation.

While Mr Brown and Tony Blair pledged to do everything possible to save the company, accountants were picking over its books this weekend to see whether parts of the business could be salvaged.

Mr Brown, on the election trail in Edinburgh, said the Government was prepared to put more money - on top of the £40 million already announced by ministers - into a package to help companies hit by the car maker's collapse.

When questioned about the salaries, pension fund, loan notes, consultancy fees and other payments made to the four executives - Mr Towers, Nick Stephenson, Peter Beale and John Edwards - the Chancellor promised to "look into the consequences of what has happened". He added: "There will obviously be inquiries into what has happened in Rover since the deal with BMW."

The Conservatives were quick to point out that the Government's stance was in stark contrast to its strong support for Mr Towers's consortium when the group struck its deal with BMW in 2000.

In a statement to MPs in May 2000, Stephen Byers, then trade secretary, praised Mr Towers's "personal strengths" and boasted that the Government had "brought John Towers and BMW" together in an attempt to save the company.

Ministers backed Phoenix ahead of Alchemy, a company that wanted to turn Rover into a "niche" operation making MG sports cars at Longbridge in a deal that would have saved 2,000 of the plant's 6,000 jobs and guaranteed £50,000 for each Rover worker who would have been laid off. Now they will get only £3,000 each.

Recent media investigations into alleged "financial sleight of hand" by the Phoenix Four were derided by Patricia Hewitt, the Trade and Industry Secretary. She said: "Company directors who take big risks and achieve big successes deserve big rewards."

Julie Kirkbride, the Tory MP whose Bromsgrove constituency includes part of the Longbridge plant, said: "Labour's interference in 2000 forced a sale to Phoenix, with the unedifying prospect that we will now have no jobs, no car production and a clique of millionaire directors who take the assets of the business and the Labour government for a ride."

Oliver Letwin, the shadow chancellor, said: "Gordon Brown has now said there needs to be inquiries into what has happened in Rover since the deal with BMW - a deal he fully backed." Last year, Rover announced an agreement with the Chinese company on a joint venture to fund programmes for new models. Last night, however, there was almost universal pessimism over the chances of any rescue attempt on a reasonable scale.

Sir Michael Edwardes, who was chairman of British Leyland in the 1970s, said it would take a "miracle" to save Longbridge, which needed investment of more than £1 billion.

He added: "The Chinese, of course, will want to manufacture in China. I don't think Rover's mid-car business had a future even 10 years ago. Indigenous volume car manufacturing in Britain is probably a pipe dream."

Had BMW reached the deal with Alchemy, the venture capital firm was prepared to fund a £427 million package that would have provided each departing employee with a £50,000-plus payoff. In the current circumstances, they could receive as little as £280 for every year of service up to 12 years, analysts said.

An editorial in yesterday's Financial Times said: "They, like BMW and the Government, must feel like mugs.

"In addition to BMW's £427 million, Phoenix inherited a stock of unsold cars worth £350 million. It sold assets, including land, a parts business and engine technologies for many tens of millions more - roughly £1 billion in cash and re--usable assets all told, apparently all consumed by Rover's loss-making manufacturing operations. Certainly not much went towards filling the £67 million hole in Rover's pension fund.

"Yet the four Phoenix partners were able to award themselves a £10 million loan note, gain personal control of a lucrative financing business and fund a £16.5 million directors' pension pot. They also transferred valuable assets from Rover to the parent Phoenix. This is capitalism at its ugliest."

Rover dealers said last night they were reluctant to offer bargain-hunters large discounts on new cars, fearing that such a move would devalue the whole range.

Many dealers said they were "in the dark" as to what level of discount they could offer because they were still waiting for details on the future of the MG Rover Group.

Lee Gullen, a dealer with Caffyns Garage, Brighton, one of the biggest MG Rover dealers in Britain, said: "If a customer walked into our showroom now and looked at a brand new car we wouldn't know what price to sell it for. That's the situation not just with us but every dealer in the country. Discounts on the sales of most new cars, not just Rovers, are dependent on bonuses from the manufacturer. We are waiting to hear from Rover as to what, if any, bonuses are being offered and what margins we have to play with. It's very difficult for us at the moment."

Meanwhile, Warwickshire, the county cricket champions, may have their fleet of players' cars repossessed following MG Rover's collapse.

The club recently agreed a sponsorship deal to supply 48 cars to players and senior staff. The fleet is leased for a nominal sum, but the cars remain Rover property and are among assets now under the administrators' control.

Warwickshire have yet to hear whether they will have to hand back the cars, but they are making contingency plans to lease alternative vehicles. Stuart Robinson, Warwickshire's head of marketing, said: "We are planning for the worst, but hoping for the best."

As part of the sponsorship deal, Warwickshire's players will wear shirts bearing Rover's name this season. The new kit was worn for the first time at Lord's yesterday for the traditional curtain-raiser to the season between the MCC and the county champions.

Patrick Hennessy, Sean Rayment and Nina Goswami,
The Sunday Telegraph, 10 April 2005

Directors awarded themselves £30m

The four Midlands businessmen who bought MG Rover for £10 five years ago, have made well over £30 million while the car-maker has lost hundreds of millions of pounds.

John Towers, Peter Beale, Nick Stephenson and John Edwards were hailed as heroes when they rescued the stricken car-maker in May 2000.

By investing just £60,000 each, the four men took control of MG Rover and received a £427 million soft loan from the vendor - the German car giant BMW.

After forming the new parent company, Phoenix Venture Holdings, the four men effectively paid themselves £10 million. They also set up a pension fund to benefit themselves and their families. Accounts show that there is £16.5 million in the fund, while the workers' pension fund was £67 million in deficit.

Separately the four men took control of MG Rover's lucrative car financing operation. The latest accounts show that there is £10.3 million of retained profits on its books.

In March last year, Martin O'Neill, chairman of the House of Commons trade and industry committee, accused the four of engaging in "financial sleight of hand".

However, Patricia Hewitt, the Trade and Industry Secretary, said: "I am not going to get involved in a discussion about individual payments but company directors who take big risks and achieve big success deserve big rewards."

Christopher Hope, Business Correspondent, The Daily Telegraph, 08 April 2005

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