'Phoenix Four' set date for a clash in court over Rover collapse

By SARAH BRIDGE, MAIL ON SUNDAY LEISURE CORRESPONDENT
Updated:

The Government is set for a legal showdown with the Rover directors known as the 'Phoenix Four' when a Freedom of Information Tribunal is heard in Manchester next month.

MG Rover collapsed into administration in April 2005 with debts of £1.3billion and the loss of 5,000 jobs.

A report into the carmaker's demise, written by the Financial Review Reporting Panel, was finished in May 2005, but has still to see the light of day as Alan Johnson, then Trade and Industry Secretary, barred publication until the Government had completed its own investigation.

MG Rover collapse protest

MG Rover collapsed into administration in April 2005 with debts of £1.3billion

After four years and at a cost of £16million, the Government's own report has now been finished but publication last week was prevented when Trade Secretary Lord Mandelson referred it to the Serious Fraud Office. The involvement of the SFO has now delayed publication until possibly after the General Election.

The four former MG Rover directors - John Towers, Peter Beale, John Edwards and Nick Stephenson --have been pilloried for their role in MG Rover after it was revealed that they took millions in pay and pensions before the company collapsed.

They want the original report published in the hope of clearing their names. Their Freedom of Information request was initially turned down by the Department of Business and Regulatory Reform, but the matter will finally be decided at the tribunal hearing on August 10 and 11.

The Government is taking the threat of publication seriously and has hired James Eadie QC to representit. The 850-page Government report is being studied by a four-strong team at the SFO headed by head of anti-corruption, Keith McCarthy. He will report to director Richard Alderman, who will take legal advice before deciding whether to launch a full-scale investigation.

The involvement of the SFO last week raised eyebrows because, until then, there had been no suspicion of fraudulent activity. The SFO is understood to be annoyed at speculation that it is being used as a delaying tool. However, sources close to the Phoenix Four have questioned its independence amid suggestions that Government officials were contacting it on an 'almost hourly basis'.

The findings of any report into MG Rover are bound to be political dynamite as Gordon Brown and Tony Blair were closely involved.

Most watched Money videos