(Adds Phoenix Four spokesman's comment)
LONDON, July 5 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 (SFO), 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 that led
to more than 6,000 job cuts.
A government representative said a statement on the issue
would be made to Parliament on Monday, but declined to
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
A quartet of executives known as the Phoenix Four took
control of the company in May 2000 after buying it for a
nominal sum of 10 pounds.
The business came with an interest-free loan from BMW
(BMWG.DE), the previous owner.
Ramsay Smith, speaking for the Phoenix Four Group, said
there was no basis "whatsoever for an investigation" by the
"At no time during the (government) investigation has
fraudulent activity been raised as a serious prospect," he
told the BBC.
"Frankly, people are flabbergasted by the leaks that have
emerged over this weekend suggesting that this is going to be
referred to the SFO," he said.
"At all times during the last four years, the directors of
MG Rover cooperated fully with the investigation by the DTI
inspectors and accounted very willingly for their actions,"
"It now seems quite extraordinary (that) people, and,
politicians in particular, are questioning yet another episode
of investigation into something that happened four years ago:
It's taken 16 million pounds of taxpayers' money to get to
this stage," he added.
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 and Stefano Ambrogi; Editing
by Simon Jessop and Matthew Lewis)