Sunday, 26 October 2014
Ex Rover bosses to receive £1m hand-out
The demise of MG Rover refuses to go away. Five former MG Rover bosses are in line for around £1 million each from the proceeds of the collapsed MG Rover car factory – years after 6,500 redundant workers were deprived of a single penny, according to newspapers reports.
The following is a report taken from the UK's Birmingham Mail of 25 October 2014.
“The much criticised Phoenix Four and ex MG Rover chief executive Kevin Howe are to receive the huge pay-outs nearly 10 years after the car firm closed with debts of more than £1 billion.
The former directors, who paid themselves around £42 million in pay and pensions over five years before s collapse, were accused by a Department of Trade and Industry inquiry in 2009 of lining their own pockets and other management failings.
The Phoenix Four – Nick Stephenson, Peter Beale and John Edwards – agreed to being banned as directors for a combined 19 years, while promises of four-figure pay-outs to 6,500 ex-workers from a trust fund were crushed following a claim from banking giant HBOS.
But now the four ex-Phoenix directors and Mr Howe are set for individual payouts of around £1 million each following a much-delayed agreement between the Pensions Regulator and liquidators Begbies Traynor..
The pay-outs, which will cause outrage among ex-workers, were revealed by MGR Capital liquidator Paul Stanley of Begbies Traynor, who confirmed that Peter Beale and John Edwards had held stakes of around 25 per cent each in the Longbridge subsidiary.
But John Towers, Nick Stephenson and Kevin Howe will also cash in handsomely after it emerged that Beale and Edwards had set up a trust called the Phoenix Partnership in relation to MGR Capital on behalf of all five men.
MGR Capital – 51.1 per cent owned by Lloyds Group which swallowed up HBOS and 49.9 per cent by Beale and Edwards on behalf of the five – was worth more than £23 million when it was liquidated, and the money has been marooned in a bank account for around five years.
It will now be distributed to the bank and the five ex-bosses following an agreement between Mr Stanley and the Pensions Regulator, which also saw more than £8 million paid out to the MG Rover Group Senior Pensions Scheme.
Former MG Rover Trust Fund trustee Carl Chinn said: “I am outraged and disgusted. If they had any honour, they would hand their money over to the workers, who have lost so much.
“The workers gave everything to MG Rover and have been treated shabbily. I am flabbergasted that these men, who made themselves very wealthy through Longbridge, will become even wealthier when so many people lost their jobs.”
Liquidator Paul Stanley said: “I do not have any options in law, all I can do in law is pay these people on the share register. I do not get a view on it, I do not get a moral standing on it; I have an obligation in law to pay out, no-one has discretion over this.”
He estimated around £12 million would be available from MGR Capital. “I have paid £8 million out of the pot – that leaves me with £13 million before costs.”
None of the Phoenix Four could be contacted for comment.”