Mandelson will ban the Phoenix Four from running other companies
11 September 2009

The government will ban the four executives who oversaw the collapse of MG Rover from ever running a company again.

An 850-page report released today says the executives, known as the Phoenix Four, took £42 million out of the company in pay and in pensions. They bought the company for just £10 from BMW in 2000, but it collapsed five years later.

Business secretary Lord Mandelson is believed to have taken legal advice about the four and will seek to have them banned from being directors of a private or public company for a fixed number of years.

John Towers, the former MG Rover chairman, Nick Stephenson, ex vice-chairman, Peter Beale and John Edwards received about £9 million. Their chief executive, Kevin Howe, is said to have taken £5.7m.

It collapsed with the loss of 6000 jobs, and amid claims that the car manufacturer was nursing a £400m black hole in its accounts and recriminations that the four businessmen had squandered a £100m sum left to them when BMW sold the company.

The men described the report as a "witchhunt" and a "whitewash for the government".

"Our remuneration was not the reason for the collapse,” they said in a statement. “The real reason is the government bungled the last chance to save MG Rover.”

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Comments
15

11 September 2009

So what the Phoenix 4 are saying is that if the government had given money they could have got away with it...? It always seemed to me that the reason for the constant PR, the racing, lack of investment in sustainable and profitable product and so forth, was to make the company look successful, in order for it to be sold for a tidy profit. It's quite clear that the money was more important than the company or it's workers. Didn't one of them recently say that "it's not a crime to be incompetent"? That's true but if they are incompetent then surely it's a good idea to ban them from running a company.

11 September 2009

Worse than Fred Goodwin. What shameful human beings. How they could be so greedy whilst steering the company and all its workers towards ruin just beggars belief.

They deserve far greater sanctions than merely a ban on future directorships - its not like they'll ever need to work again anyway.

11 September 2009

[quote Casanova]

Worse than Fred Goodwin. What shameful human beings. How they could be so greedy whilst steering the company and all its workers towards ruin just beggars belief.

They deserve far greater sanctions than merely a ban on future directorships - its not like they'll ever need to work again anyway.

[/quote]

can't agree I'm afraid. It's the Germans wot dunnit. It's all their fault, damn Bosch. If they hadn't enticed poor Mr Towers with their blatant hundreds of millions of euros of their money and offers of thousands of cars in stock, poor John would not be in the sticky bind he finds himself now - grossly unfairly say I. Okay, John and his business partners were fond of a round of golf or two rather than attending to the frankly mind-numbing business of running a car plant and new product development, but then who wouldn't be - have you ever been to a car plant or an engineering centre and had to deal with the people in those places? Good god, £10m each would be cheap I say. These men were risk takers, entrepreneurs in the best tradition of free market capital - okay, the capital was handed to them by the Bavarians - and should be allowed to reap the rewards of their labour - seeking out the very best golf clubs internationally and which fine wine to sup is not a simple task, I can assure you.

We must look on the bright side in all this. John and the boys have really done us all a favour - out with the stinky, horrid old factories and in with houses for thrusting buy-to-leters, business parks, for thrusting venture capitalists and supermarkets, for thrusting er, Tesco. That's what will rebuild this country - commerce. Selling houses to each other, not making dull things like 20th century cars; consuming imported goods from lovely shopping emporiums like Tesco's. You'll see, it'll all work out grand.

11 September 2009

[quote Casanova]its not like they'll ever need to work again anyway.[/quote]

Or that you'd ever want to employ them!

I hate to say it, but this time the government did right by not giving them an extra £ 100 million to add to their pension pots.

The reason that MG Rover failed was because of the mis-management of the Phoenix Four, plus one. They did nothing to return the business to profit.

11 September 2009

[quote James Ruppert]What a waste of £16m quid, when just reading the last few chapters of The British Car Industry Our Part in its Downfall a snip at £12.98 on Amazon would have sufficed[/quote] Or 'DeLorean' by Delorean John Z, Ted Schwarz

11 September 2009

[quote danny bahr]

can't agree I'm afraid. It's the Germans wot dunnit. It's all their fault, damn Bosch. If they hadn't enticed poor Mr Towers with their blatant hundreds of millions of euros of their money and offers of thousands of cars in stock, poor John would not be in the sticky bind he finds himself now - grossly unfairly say I. Okay, John and his business partners were fond of a round of golf or two rather than attending to the frankly mind-numbing business of running a car plant and new product development, but then who wouldn't be - have you ever been to a car plant or an engineering centre and had to deal with the people in those places? Good god, £10m each would be cheap I say. These men were risk takers, entrepreneurs in the best tradition of free market capital - okay, the capital was handed to them by the Bavarians - and should be allowed to reap the rewards of their labour - seeking out the very best golf clubs internationally and which fine wine to sup is not a simple task, I can assure you.

We must look on the bright side in all this. John and the boys have really done us all a favour - out with the stinky, horrid old factories and in with houses for thrusting buy-to-leters, business parks, for thrusting venture capitalists and supermarkets, for thrusting er, Tesco. That's what will rebuild this country - commerce. Selling houses to each other, not making dull things like 20th century cars; consuming imported goods from lovely shopping emporiums like Tesco's. You'll see, it'll all work out grand.

[/quote]

I almost agreed with you until the point about Tesco being shopping emporiums....have you been to one?

11 September 2009

On the basis of what seems like an extremely short summary of an 850 pages long report and considering that it actually is holding those four individuals responsible in some way, the first thing which crossed my mind was that the conclusion or the punishment sounds like telling a thief who has just gotten away with a hefty heist that he would not be allowed to steal for another few years at least; in the mean time, can enjoy life as much as would like to but would have to use pick from just the current heist for the payments of bills.

Whenever a company goes bust which has a complete management structure rather than being an employ owned organization, how can those who are in charge of managing the affairs, providing leadership and setting future direction either absolve themselves or hope for complete absolution? Making matters worse are the instances when such individuals or groups of individuals are just not held accountable at all.

11 September 2009

I trust that this action will be followed by banning all of the directors of the banks that had to take Government support over the last couple of years (that had a far greater impact on the UK economy than the Phoenix Four ever could), in particular Northern Rock and Halifax BoS as both of these effectively went bust. It was only our money that kept them afloat.

11 September 2009

Can the Government really ban directors? I thought we had separation of the administration of the law and the Government so that some jumped-up small minded politicial hack can't victimise people for political ends.

Just call me naive.

11 September 2009

So these guys got £42m and did not break the law and kept some people in employment for some months longer than they otherwise would have been employed for.

Then the Government spent £16m on a report. £16m!!!

That's more of a crime because we all paid for that. At least the Four only affected Rover employees and even that is down to interpretation as to whether Rover was truly viable or not in the first place.

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