Following an investigation into the collapse of MG Rover, four of the company’s former directors have been banned from being involved in the management of any company for a number of years.
MG Rover Group (MGRG), the manufacturer of Rover and MG cars, went into administration on 8 April 2005 owing creditors nearly £1.3bn. The UK secretary of state then appointed inspectors to investigate the affairs of MGRG, its parent company Phoenix Venture Holdings (PVH) and MGR Capital.
An independent report showed how 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.
It was the position of the UK Insolvency Service that the overall conduct of the so-called Phoenix Four made them unfit to be company directors. As a result, Peter Beale has been disqualified from acting in the management of companies for six years; John Towers and Nick Stephenson have each been disqualified for five years; and John Edwards has been disqualified for three years.
Commenting on the disqualification undertakings, 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.’