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Boardroom ban for MG Rover’s phoenix four 10 May 2011

John Towers, Peter Beale, Nick Stephenson and John Edwards, who were also directors of Phoenix Venture Holdings, siphoned off around £42m in pay and pensions for themselves as MG Rover was heading for administration.

All were banned as directors for varying periods of between three and six years after the Insolvency Service concluded an investigation into their conduct at MG Rover.

Beale was disqualified from acting in the management of companies for six years; Towers and Stephenson were disqualified for five years and Edwards for three years.

Before the Insolvency Service’s investigation, a four-year independent report was launched into the circumstances around MG Rover’s collapse.

It revealed that one day after the government appointed inspectors to investigate MG Rover’s demise, Beale bought a software program called Evidence Eliminator. He used it to delete documents on his computer, including one entitled Joint Assets.

Since the publication of this report, the Insolvency Service has been taking forward proceedings to disqualify the directors.

The Insolvency Service said it found that the overall conduct of the phoenix four made them unfit to be company directors.

Edward Davey, minister with responsibility for corporate governance and company law, said: “The outcome of this case serves as an important reminder that unacceptable conduct by company directors can result in lengthy periods of disqualification.”

The Insolvency Service investigation discovered that the directors manipulated assets and income streams through the use of companies in which they, rather than MG Rover’s creditors, could benefit.

In doing so, the directors pocketed large salaries, dividends and profits.

The phoenix four agreed to voluntary disqualification and have pledged to make up to £30m available from liquidated assets to be shared among the former 6,000 staff.
MG Rover Group (MGRG) went into administration on April 8, 2005, owing creditors nearly £1.3bn and axing around 6,000 jobs.

The government appointed inspectors to investigate MGRG, its parent company Phoenix Venture Holdings (PVH) and MGR Capital Limited between the purchase of MGRG from BMW in May 2000 and the date of it entering administration.

 

 

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