'Phoenix Four' disqualified from directorships after

paying 42m in bonuses while running car firm into the

ground
'Phoenix Four' disqualified from directorships after paying 42m in
bonuses while running car firm into the ground
Four former MG Rover directors, who paid themselves millions as they ran
the car manufacturer into the ground, have been banned from acting as
company directors for a combined total of 19 years. The so-called
"Phoenix Four" of Peter Beale, John Towers, Nick Stephenson and John
Edwards acquired Britain's last remaining volume car producer from BMW
for a nominal 10 in 2000, with the enthusiastic backing of the then
Labour government. They then spent the next five years pocketing huge
awards before the firm collapsed in 2005, owing 1.3bn to creditors and
putting thousands of people out of work. Edward Davey, the business
minister with responsibility for corporate governance and company law,
said: "These disqualification undertakings represent a successful
conclusion to a lengthy and complex investigation into the collapse of MG
Rover. Peter Beale, John Towers, Nick Stephenson and John Edwards have
each been banned from being involved in the management of any
company for several years. The outcome of this case serves as an
important reminder that unacceptable conduct by company directors can
result in lengthy periods of disqualification." From 17 May, Beale will not
be able to work as a director for six years, Towers and Stephenson for five
and Edwards for three. Companies House records show that Beale, Towers
and Edwards all resigned from a company called Techtronic (2000) last
month, while they also reveal that Towers remains as a director of a
company called Hatwel, along with his wife Bethanie. When MG Rover
collapsed in April 2005 with the loss of 6,500 jobs, the Phoenix Four and
former MG Rover chief executive Kevin Howe had paid themselves a total
of 42m. Howe has not been banned, although he has no current
directorships. The disqualifications follow a government report into the
financial affairs of MG Rover and its associated businesses, which was
launched in May 2005 under Section 432 of the Companies Act by then
trade and industry secretary, Alan Johnson. Advertisement It found that
the conduct of the Phoenix Four made them unfit to be company directors
and that throughout their reign, a complex corporate structure was
adopted that saw the creation of 33 separate companies. The report
stated that 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. Inspectors also investigated Beale's purchase,

installation and operation of computer software that deleted data from a

laptop a day after the inquiry was announced, as well as the role of the
government in securing bridge finance while takeover talks took place
with the Chinese carmaker Shanghai Automotive (SAIC). The quartet, who
always denied any wrongdoing, described the report as a "witch-hunt" and
a "whitewash". At the time of its publication they said: "It drips with the
hallmarks of this government spin, smear and point-blank refusal to take
any responsibility for their own actions." They added: "[Our remuneration]
was never a secret. [The government] did not have to spend 18m [on a
report] to find that out. Our remuneration was all in the company accounts
and signed off by Deloitte, one of the world's most respected firms of
auditors. It was entirely legal, above board, and much less than similar
payments in large car companies." When Phoenix acquired Rover in May
2000, jubilant Rover workers hailed Towers as he arrived at the Longbridge
plant in a Rover 75, chanting: "There's only one John Towers" and waving
banners saying "Phoenix Will Fly", while the then industry secretary
Stephen Byers was cheered by MPs when he announced the deal. BMW
had been threatening to close the plant before the Phoenix deal. Jon
Moulton, the then boss of venture capital group Alchemy, was also
involved in lengthy talks with BMW over a competing bid that would have
resulted in a far smaller MG Rover with many more redundancies. He
blamed political support for Phoenix for the collapse of his plan.
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