Phoenix Four banned from being directors

THE four former directors of MG Rover – known as the Phoenix Four after the name of their firm Phoenix Venture Holdings – have been disqualified from being company directors for periods of between three to six years.

The four men – John Towers, Nick Stephenson, Peter Beale and John Edwards – were disqualified following the conclusion of an investigation by The Insolvency Service on behalf of the Government.

The investigation centres on the activity of the four men in the final days on MG Rover, which collapsed more than six years ago with the loss of 6,000 jobs.

Disqualification proceedings began following an independent report two years ago into the financial affairs of MG Rover and its associated companies.

The Insolvency Service, in line with the findings of the report, concluded that taken as a whole, the overall conduct of the Phoenix Four made them unfit to be company directors.

The four men have denied any wrong doing.

Inspectors were appointed in May 2005 immediately following the group’s collapse and the subsequent inquiry followed the administration of the MG Rover Group, which owed creditors nearly £1.3bn.

The inspectors were appointed to investigate the affairs of MGRG, its parent company Phoenix Venture Holdings (PVH) and MGR Capital Ltd between the purchase of MGRG from BMW in May 2000 – for a nominal £10 – and the date of it entering administration.

They also investigated restructuring changes within the group which led to the creation of 33 separate companies; the scale of financial rewards made to the directors and the events which led to administration itself. This included the role of Government to secure bridge financing while take-over discussions took place with Chinese car manufacturers Shanghai Automotive (SAIC).

The Inspectors also investigated the purchase, installation and operation of software to eliminate data from a laptop by one of the directors, Peter Beale, the day after the inquiry was announced.

The Insolvency Service highlighted the way the directors manipulated the assets and income streams through the use of companies in which they, rather than the creditors of MG Rover had an interest, allowing them to benefit through large salaries, dividends and profits.

Edward Davey, Business Minister with responsibility for corporate governance and company law said: “These disqualification undertakings represent a successful conclusion to a lengthy and complex investigation into the collapse of MG Rover.

“The outcome of this case serves as an important reminder that unacceptable conduct by company directors can result in lengthy periods of disqualification.”

Peter Beale has been disqualified for six years; ex-Rover chief executive John Towers and Nick Stephenson have each been disqualified for five years and John Edwards for three years.

The disqualifications come into effect on May 17.

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