July 5, 2009 / 3:15 PM / 8 years ago

UK delays report on Rover pending fraud probe-media

2 Min Read

LONDON, July 5 (Reuters) - The British government is to delay the publication of a report into the collapse of carmaker MG Rover in 2005 pending an investigation by the Serious Fraud Office, British media reported on Sunday.

The move, which the Sunday Times newspaper said would be announced by Business Secretary Peter Mandelson on Monday, follows a four-year inquiry into the company's demise which led to more than 6,000 job cuts.

A government spokesperson said a statement on the issue would be made to parliament on Monday but declined to elaborate on what it would say.

Opposition politicians accused the government of deliberately delaying the report which they said would show it wasted millions of pounds of taxpayers' money propping up the car company in the run-up to the 2005 election.

"I welcome the introduction of the fraud squad into what appears to be a major corporate scandal but it must not be used as a smokescreen to hide what the public needs to know," said Vince Cable, the Liberal Democrat's Treasury spokesman.

MG Rover, Britain's last major independent carmaker, went into administration in April 2005 with debts of more than a billion pounds.

A quartet of executives known as the Phoenix Four took control of the company in May 2000 after buying the company for a nominal sum of 10 pounds.

The business came with an interest-free loan from BMW (BMWG.DE), the previous owner.

A public accounts committee criticised the government in 2006 for its lack of dealings with the company's new owners and for not being sufficiently prepared when it collapsed.

Reporting by Christina Fincher; editing by Simon Jessop

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