30th October 2014
The past week saw a stir in the press as it was reported the Phoenix Consortium are in line for another multi million pound windfall. It was first reported in the Birmingham Post they are in line for a further £6million due to the winding up of MG Rover Capital and the release of cash reserves locked in the accounts since 2005. This news comes a year after telling the ex-workers no money would be given to them for their Employee Trust Fund. Speaking after closure, John
Towers said he hoped up to £50million would be available to off-set the fact the 6,500 workers were made redundant with no company redundancy payout, despite themselves being remunerated with a reported £42million.
When asking (in 2010) about the potential for this money to be available for the Employee Trust Fund, John
Towers commented he expected the money to be wiped out by claims.
Upon hearing this news and how the potential windfall conflicts with previously expecting nothing from the company - I’ve written an open letter to John
Towers requesting this money now be made available to the ex workers. A copy is attached here:
Open Letter to John Towers & P4 30-10-14.pdf
9th September 2013
Breaking news that Deloitte have been fined a record £14million for their role in advising the former MG Rover directors. Read more on the story here:
29th July 2013
Breaking news today that Deloitte have been found guilty of significant misconduct by the Financial Reporting Council (FRC).
A tribunal hearing found that the firm of accountants had broken professional standards when advising the MG Rover directors - the Phoenix Four.
The case could see a landmark judgment with the potential for an unlimited record fine. In addition to this Deloitte will have to pay costs reported so far at around £1.75 million. It is understood further details will be announced tomorrow.
Here are some of the breaking articles on the story:
5th February 2013
Last week I was delighted to be able to visit the Acorns Children’s Hospice in Selly Oak, Birmingham. This was following the donation of £23,352.10 by the ex MG Rover workers via the employee trust fund. The Acorns have prepared an article containing not only a very big thank-you, but also some information about the Acorns, the incredible work that they do and some information about how important the money will be to them. To read this article, please click on the tab on the left: A message from the Acrons. Here is the link to the Birmingham Evening Mail's write up of the event:
19th December 2012
It is confirmed now that a cheque for £23,352.10 has received by the Acorns. There will be a formal presentation in the new year. Kind thanks to everyone who has made this happen, wishing you all a very happy Christmas and a great 2013.
14th November 2012
Breaking news of the decision to award the money in the trust fund to the Acorns charity:
10th September 2012
We continue to welcome all comments and suggestions regarding what to do with the Trust Fund money. The tab on the left hand side called ''Ex workers comments ref. trust fund money'' shows all of the feedback so far.
9th August 2012
As reported in today's Birmingham Post, it has now been confirmed that the MG Rover Trust Fund is to be wound up, with no money made available for the ex-workers: http://www.birminghampost.net/news/2012/08/09/mg-rover-trust-fund-finally-to-be-wound-up-without-workers-receiving-a-penny-65233-31578855/
It is a sad end to a long saga. At the time of closure 6,500 workers lost their jobs with no company redundancy pay.
In this BBC interview John Towers CBE discusses the Trust Fund at the time of the MG Rover collapse in 2005 (it's approximately 3 minutes 40 seconds into the clip - http://www.youtube.com/watch?v=eYG78PtEaqQ)
For those who don't want to watch the video the interview is as follows.... question: ‘‘‘..they’re (the ex-workers) walking away with nothing, you're walking away with a fortune?'', answer: ''We're trying to place a fortune into a benefit for all of the employees and their families and dependants. We've launched today an employee trust which Carl Chinn, Nigel Petrie and the Bishop from Birmingham have agreed to be trustees for. That's got gross assets in excess of £50million. Cleary there are creditors, all though only a few, and also perhaps people from MG Rover Groups creditors who will try to attack that, those assets, but I am very confident that there will be millions of pounds available for those employees to help them with that difficult period. ''
After buying MG Rover from BMW for £10 in 2000, the ''Phoenix Four plus One'' as they're known, went on to make over £42million in remuneration, despite continued concerns from the then Department of Trade and Industry. This remuneration was highly criticised in the £16million Government Enquiry published 2009, where the only trust fund mentioned was their own offshore one in Guernsey to which they would transfer over £10million for their own pensions.
Now, 7 years after closure, it is confirmed by Phoenix that:
(i) all of the legal avenues perused by Phoenix have not be fruitful and basically, there is no money left from the assets for the trust fund.
(ii) the ex Phoenix directors have refused the request to make a personal donation from their fortunes to the trust fund, despite hundreds of people supporting this campaign for them to do so and public calls from the likes of Carl Chinn and Richard Burden MP.
(iii) The ex-directors stand to profit even further, sharing the bounty that is held in MG Rover Capital (yet to be wound up) which is holding up-to £20million in cash. (Should this money be available them, the request was made by Carl/Eric and myself to transfer this money ‘fresh money’ to the trust fund, the Phoenix directors this refused too).
Upon the creation of the Trust Fund in 2005 approximately £23,000 was allocated for the future administration costs of the distribution of the promised millions. It is now to be decided what to do with this money.
For the social networkers among us, there is an online facebook group (search for Justice for Rover Workers) and here some ex workers expressed an interest for the money to go to a local charity. Carl and Eric and I would welcome all suggestions, please feel free to join the facebook group and add to the ongoing debate, or send an email to email@example.com with your thoughts. I will publish all in the comments and questions tab and pass them all on to Carl/Eric.
9th August 2012
As reported in today's Birmingham Post, it has now been confirmed that the MG Rover Trust Fund is to be wound up.
It is a sad end to a long saga. In this BBC interview John Towers CBE discusses the trust fund at the time of the MG Rover collapse in 2005 (it's approximately 3 minutes 40 seconds into the clip - sorry, only one I could find.. http://www.youtube.com/watch?v=eYG78PtEaqQ) For those who don't want to watch the video.... Question: '''They're (the ex-workers) walking away with nothing, you're walking away with a fortune?'', Answer: ''We're trying to place a fortune into the benifit of all of the employees and their families and dependants. We've launch today an employee trust which Carl Chinn, Nigel Petrie and the Bishop from Birmingham have agreed to be trustees for. That's got gross assets in execess of £50million. Cleary there are creditors, all though only a few, and also perhaps people from MG Rover Groups creditors who will try to attack that, those assests, but I am very confident that there will be millions of pounds available for those employees to help them with that difficult period. ''
After buying MG Rover from BMW for £10 in 2000, the ''Phoenix Four plus One'' as they're known, went on to make over £42million for themselves. Today, 7 years after closure, it is confirmed that (i) all of the legal avenues persued by Phoenix have not be fruitful and basically, there is no money left from the assets for the trust fund. (ii) the ''Phoenix Four plus One'' have refused the request to make a personal donation from their fortunes to live up to their word, despite hundreds of people supporting this campaign along with public figures such as Carl Chinn, the Arch Bishop of York John Sentamu and numerous local MPs notably Richard Burden & John Hemming.
Upon the creation of the Trust Fund in 2005 approximatley £23,000 was allocated to it for the future administraion costs of the distrubition of the promised millions. It is now to be decided what to do with this money. There is an online facebook group (search for Justice for Rover Workers) and here some ex workers expressed an interest for the money to go to a local charity. Carl Chinn and Eric McDonald, 2 trustees of the Trust Fund along with myslef would welcome all suggestions, please feel free to join the facebook group and add to the ongoing debate, or send an email to firstname.lastname@example.org. I will publish all in the comments and questions tab and pass them all on to Carl/Eric.
6th August 2012
Reports this week that Deloitte will face a tribunal over all allegations about its work in the run up to MG Rover's demise.
8th July 2012
At the last meeting to discuss the MG Rover Trust fund (discussed in the previous update but in attendance from Phoenix Venture Holdings were Nigel Petrie/Peter Dillon, Trust Fund Trustees Carl Chinn/Eric McDonald and myself from JFRW) the action upon Nigel and Peter was to ask, for one final time, the ex MG Rover directors to place a substantial contribution into the Trust Fund.
We are still awaiting feedback on this request however feedback has been promised shortly.
Any updates on this situation will be posted here.
3rd May 2012
Since the meeting on Monday there has been widespread media coverage covering the MG Rover trust fund story. Below is a summary of the national/local pieces:
We continue to await a response from Phoenix Venture Holdings representatives to our request that a substantial personal donation be made to the trust fund as soon as possible. This is since they confirmed that they have exhausted all avenues to provide money to the trust, 7 years after the closure of MG Rover when they made a public promise pledging assets of up to £50 million for an employee trust fund. The Phoenix Venture Holdings directors purchased MG Rover for £10 in 2000, by 2005 they had personally profited an estimated £42 million. Potentially they can yet profit further, over £10 million before the end of the year. However, all that lies in the trust fund is £23k, originally set aside for administration costs. If this fund is to close as they have suggested, then this works out at around £3 per ex worker.
30th April 2012
Today on behalf of the Justice for Rover Workers group I attended a meeting with Nigel Petrie and Peter Dillon (representing Phoenix Venture Holdings) and trust fund trustees Prof. Dr. Carl Chinn and Eric McDonald. The other trustee, the Archbishop of York Dr John Sentamu, was unable to attend.
At the meeting an update was provided on the recent legal proceedings from Phoenix Venture Holdings against Price Waterhouse Coopers. This was an attempt to reclaim monies taken from the Phoenix Venture Holdings accounts which had been earmarked for the ex-employee trust fund. The sum of over £12 million was taken from the accounts by HBOS unfairly in the view of Phoenix Venture Holdings.
I’ve attended numerous meetings with Nigel Petrie and Peter Dillon over the course of the last two years and it has been made very clear that any attempts to secure money for the trust fund were dependant on a successful outcome of this case. Sadly, as reported today, their legal claims reached the high courts last month and were unsuccessful.
Both the Archbishop Dr Sentamu and Phoenix Venture Holdings representatives have contacted the Lloyds Banking Group (the parent group of HBOS) in an attempt to recoup the money on moral grounds. These pleas were rejected.
Therefore, as presented at today's meeting Phoenix Venture Holdings claim that all avenues to secure funds for the trust fund have been exhausted. Closure of the trust fund was therefore discussed.
At this point Carl Chinn, Eric Mcdonald and I made one final last request to the Phoenix 5 via Nigel/Peter for them to make a substantial sum from their collective £42 million MG Rover remuneration, available for the trust fund. However, such calls have already been made continuously by Carl Chinn in the press and also by myself at the face-to-face meetings, all of which have been flatly rejected.
The situation regarding MG Rover Capital was also discussed. Prior to the meeting I recently contacted the Pensions Regulator and also the acting liquidator to understand the situation regarding the remaining money on the accounts. This sum is approximately £23 million in cash. The pensions regulator has until the end of December 2012 to make a claim. Should it not do so, the money will be split between its directors; HBOS 51% and the nominated Phoenix Venture Holdings directors 49%. It was again made clear today, that should the situation arise that this money isn’t claimed by the pensions regulator, nothing would be transferred to the fund meaning that the ex-directors would stand in line for a further £12 million cash bonus. As MG Rover Capital is not part of the Phoenix Venture Holdings umbrella, it is deemed non-applicable for the trust fund.
It is with great sadness then, that hopes for the trust fund now lie with the rallying call from Carl, Eric and myself to the Phoenix 5 to show some morality to the ex workers and make a significant contribution to the trust fund. Should this be unsuccessful, plans for the £23k currently on the accounts of the trust fund (set aside for the administration costs to deal with the pay-out we had hoped for) have to be concluded by the trustees and the trust fund will close – over 6 years since John Towers made a promise to pledge up to £50million into the trust fund to be split among the unfortunate 6,500 workers. Here is a video clip showing a BBCinterview with John Towers, shortly after closure where he discusses the pledge to the trust fund (it's approximately 3 minutes 40 seconds into the clip)http://www.youtube.com/watch?v=eYG78PtEaqQ
We await the feedback of our request and will publish onto this website any news at it happens.
22nd February 2012
So, as described in the 6th December update, the story continues. Next week, lawyers acting on behalf of Phoenix Venture Holdings will have their case heard in the Chancery Division of the High Courts. They're requesting the release of information that they believe will aid their attempts to recoup money from Lloyds. The Birmingham Post tonight covers the story: http://www.birminghampost.net/birmingham-business/birmingham-business-news/businesslatest/2012/02/22/mg-rover-longbridge-cash-battle-reaches-court-65233-30383149/
8th January 2012
A petition has been started by Mark Anthony France seeking the creation of a museum on the Longbridge site to remember the history of the factory. To sign the petition, please follow this link. http://haveyoursay.whub.org.uk/whub/KMS/Epetitions.aspx?strTab=EPetitions&PageContext=EPetition&PageType=item&DMartId=165
4th January 2012
Here is a link to the story published in todays Birmingham Post in reference to the latest situation regarding the attempts to recoup money from HBOS bank for the trust fund:
8th December 2011
Local historian and BBC presenter Prof. Dr. Carl Chinn today got in touch expressing his full support once again for the Justice for Rover Workers (JFRW) campaign. He spoke of his serious concerns for the outcome of the trust, 6 years after being asked in good faith to be a trust fund trustee, along with the Archbishop of York (at the time, Birmingham) Dr. John Sentamu (and trade union representative Eric McDonald).
Carl and I have spoken regularly from the very start of the JFRW campaign. He believes the PVH (ex) directors should put their own money into the trust fund immediately in lieu of any extra money, to help those most affected by the closure. He spoke today of his heightened concern for the ex workers since the economic crash and expressed his genuine sadness that over 6 years since the closure the ex workers are still left out of pocket and with a very large unfulfilled promise.
6th December 2011
Are we going to get any money from the trust fund?
I've continued working in recent weeks on the trust fund but the slight interruption in updates was to allow a few points to be verified first. This time last year and still today there remains a lot of confusion around where certain matters lie and what follows is a snap shot of current events.
In the last 12 months I've spoken with Nigel Petrie and Peter Dillon on behalf of the JFRW campaign on a number of occasions. I've attempted to ask as many of the questions raised via the website and through personal emails as possible. (N.B. Nigel Petrie is the leading director of Phoenix Board – MG Rovers parent group – since the ‘Phoenix 4’ resigned in April http://www.birminghampost.net/birmingham-business/birmingham-business-news/automotive-business/2011/04/18/phoenix-four-quit-as-directors-of-phoenix-venture-holdings-65233-28539457)
The trust fund for the ex-workers remains empty, six years and seven months after they were promised up to £50million from John
Towers (see approximately 3 mins 40 secs into this BBC interview http://www.youtube.com/watch?v=eYG78PtEaqQ)
It is often suggested in the public domain and media commentary that John
Towers and his fellow Phoenix Directors bought the company for £10 in 2000. However, during their tenure the Phoenix Directors accumulated some £42million in remuneration. The closure in 2005 remains the largest mass site redundancy in the UK for over 25 years. Upon closure many workers were paid half their month’s salary, had no company redundancy pay and had to wait weeks to receive state benefit. Figures produced by Professor David Bailey, Birmingham
School (2008), showed the average worker suffered a significant post-closure wage drop of £5,640, based on research figures pre-dating the global economic downturn. Although around a third remained within the manufacturing sector on a comparative wage, around two thirds who transferred into the service sector saw their wages drop (see: http://www.theworkfoundation.com/Assets/Docs/A3%20fold%20flier%20-%20LOW%20RES.pdf)
It is understood that the money intended for the trust fund would be derived from any funds that remained after the Phoenix Venture Holdings creditors were paid. Although when speaking at the time John
Towers indicated the millions would be made available within weeks, this date was then changed pending the publication of the then Governments inquiry; since published in 2009.
Nigel Petrie confirmed that around £12 million had been put aside for transfer into the trust fund. This money could be seen as ‘what is left’ after the closure of MG Rover. However, a disputed claim from HBOS has seen the money withdrawn from the accounts meaning any funds allocated to the trust have been assigned to the bank.
So - what options remain for money to be paid into the fund?
There remains three ways that money can be paid into the trust fund. At the moment, only £26,000 has been transferred, which is ring-fenced for any future administration costs. I've continued to follow each of the areas closely and have in recent weeks been able to obtain further documentation which raises a number of pertinent questions.
1 – ‘the HBOS claim’
From the figures available in the public domain the £12million did exist in a PVH account. This £12 million however, was subsequently withdrawn by HBOS. Nigel Petrie and Peter Dillon believe this was done unfairly and are in legal proceedings to claim this back. They claim legal costs to date of more than £2 million in pursuit of this. Should they be successful, this money has been promised for the trust fund throughout all of the conversations held with Nigel.
Nigel and Peter have continued to seek legal advice and are due to have their case hearing in front of a registrar in London in February 2012.
The claim from Nigel is that the money disappeared when HBOS, owned by Lloyds Banking Group of which HM Treasury holds a 41% stake, made an apparent second claim for what he protests was a previously settled debt.
A fleet MG Rover vehicles were a cross guarantees for temporary loans to PVH. It can be proved through the records of the Price Water House Coopers (PwC) report, that PwC (the administrators appointed liquidators) facilitated the sales of the vehicles and the money raised was paid to HBOS. It appears there may have been a second claim after this for this disputed money.
Throughout the conversations, Nigel and Peter have also pointed out that in support of their case, they requested the release of certain documents from under the Freedom of Information (FOI) act. In 2007 a copy of the report prepared (but never published) by the Financial Reporting Review Panel for the then Secretary of State for Trade and Industry was requested. This was refused in the first instance and was refused again on appeal in 2009.
After some searching on the internet, it was possible to find a copy of the report prepared by the Information Commissioners Office, part of the Department for Business, Enterprise & Regulatory Reform (BERR), which discusses why this FOI request was turned down. It appears the information exchanged between the Financial Reporting Review Panel and the Department for BERR was in confidence. Breaking this trust has been deemed by the Commissioner at greater public interest than releasing a copy of the report (see: http://www.ico.gov.uk/upload/documents/decisionnotices/2009/fs_50176388.pdf)
When speaking to Nigel Petrie and Peter Dillon over the course of the year, they were keen to point out that their shrewd financial negations over the sale of the assets (for the benefit of PVH and ultimately the trust fund) were the reason this money (the £12 million) was fortunately still available for the ex-workers despite having to fend-off claims from a number of creditors, which ultimately has taken time.
2 - MG Rover Capital
It is widely reported in media commentary and the public domain that £22 million lies within the accounts of MG Rover Capital. The account is reported to have profited the Phoenix Directors more than £2 million in dividends since the closure of MG Rover. However, there is a claim on this money from the Pensions Regulator and apparently the funds have been ring-fenced pending investigation. Last week, John Hemming MP agreed to write to the Pensions Regulator to clarify if this is still a claim and to try and obtain the details on it. I will post the outcome onto this website.
However, if it is assumed this claim turns out to be false, I asked on behalf of the JFRW group throughout the year to Nigel if this money would be made available or the trust fund. Nigel Petrie and Peter Dillon confirmed that it would not as it did not fall under the list of companies that compensate Phoenix Venture Holdings. This would mean that combined with their original £42million, they would have profited over £68million pounds since 2000, whilst funds transferred for the ex-workers would remain at nothing.
3 - Personal Contribution
Trustee Carl Chinn has repeatedly called for the ex-directors to personally contribute £1 million to the trust find in lieu of any extra monies to help those affected by the closure. This request has been refused. In our discussions this year on behalf of the JFRW group I also asked if personal donations would be made but again this was refused. Richard Burden MP has publicly argued the same point also to no avail. Along with John Hemming MP this matter has been discussed in the House of Commons on numerous counts but with no outcome.
What about the government in all this?
The Phoenix Directors argue that Gordon Brown, the then Chancellor of the Exchequer, blocked the bridging loan that would have ultimately been the saviour of MG Rover. The Phoenix Directors claim the then Prime Minister Tony Blair was in favour of the loan that they claim would have preserved the deal with SAIC. They say it was Gordon Brown who broke the deal upon his advice from Baroness Shriti (see: http://www.dailymail.co.uk/news/article-1198210/Gordon-Brown-responsible-letting-MG-Rover-bust.html)
Following the closure of MG Rover the Government funded a four-year, £16 million inquiry into the collapse of the company. At the time of completion it was felt by the then Business Minister, Peter Mandleson serious enough for him to delay publication in order to hand to the UK Serious Fraud Office for further investigation.
The SFO however refused to investigate further. Their reason for doing so has never been published. On the SFO website it says ‘the inspectors report has not been made public, the SFO is unable to go into detail about the reasons for its decision’ (see: http://www.sfo.gov.uk/press-room/latest-press-releases/press-releases-2009/mg-rover.aspx)
The report by the National Audit Office 2006 (see: http://www.official-documents.gov.uk/document/hc0506/hc09/0961/0961.pdf) discusses the Governments position regarding the bridging loan at the time of closure.
- Appendix 7 shows their interpretations of the events regarding the bridging loan in a timeline. It claims that information was gathered that SAIC had withdrawn from the deal.
- However, it is suggested that they also thought that it was possible SAIC may have re-entered negations.
- Also stated is that at the time of closure the Government knew of other potential parties that were interested in negotiating a deal with the Phoenix Directors and the report criticises the handling of this matter.
- Finally it is claimed that in the week leading up to MG Rover going into administration senior Government members were informed by KPMG, its financial investigator, that the directors were taking weekly legal advice on the issue of wrongful trading.
In a letter written to me in July 2010 Vince Cable stated that it is not for HM Government to intervene in the management decisions of Lloyds Banking Group or HBOS. He also mentioned that the Pensions Regulator Determinations panel were investigating the issue, which would put claims directly against the £22million assets.
In a recent letter from Lloyds Banking Group they confirm their belief that all claims made on the MG Rover assets were legitimate.
At the moment it remains very difficult to envisage that any money will come into the trust fund given the many different obstacles currently in the way as outlined above. However, keeping the issue within the public domain puts continued pressure on the Phoenix Directors to remind them that there are 6,500 former employees watching these events very closely and hoping dearly that one day they will honour their pledged promises. Until then, via the JFRW we will continue to do our utmost to bring attention to the issue.
30th November 2011
Good luck to everyone attending the ex-workers reuninion tomorrow. http://www.birminghammail.net/news/birmingham-news/2011/11/29/mg-rover-workers-to-stroll-down-memory-lane-97319-29858812/
In the last weeks I've prepared quite a bit up date which I am going to post in the coming days. At the moment it is under approval from the various people who have provided references.
1st October 2011
Since the last update I've been in contact with Nigel Petrie who has provided further information regarding the situation of the trust fund. However, I've been waiting for a reply as to what can be posted onto this website as some of the information is sensitive to the ongoing legal case regarding MGRDP funds.
Nigel confirmed that the active members of the PVH board are Nigel Petrie, Peter Dillion and Jane Ruston. The original 4 directors of PVH have stood down from their roles but retain their positions as shareholders.
Although some feel the situation is over regarding releasing funds into the trust fund, Nigel assured me this is not the case and the legal proceedings are now pending the next stage which will be early in the New Year.
In the mean time, I've been trying to speak to various senior influential figures to gather support/momentum to maintain pressure on HBOS from both a political and moral standpoint and can only offer Nigel support in this area if this is to help secure funds for the trust.
5th September 2011
Hoping to gain further clarification on the state the trust fund and the HBOS claim this week. Will post on here as soon as I hear something.
8th August 2011
Former MG Rover Chief Executive Kevin Howe is ''back in business'' according to the The Guardian / The Observer. Please click here to read the article:
9th May 2011
Lots of activity in the press today, following yesterdays ban for the Phoenix directors. Carl Chinn and I were on the Ed Doolan show on BBC Radio West Midlands at lunch time debating the point, click here for a link (approximately 1hour 5minutes in) http://www.bbc.co.uk/iplayer/console
A link to the story that today Steve McCabe MP has criticised the ban: http://www.bbc.co.uk/news/uk-england-birmingham-13332029
More from the main story:
8th May 2011
The Phoenix 4 are disqualified from being directors: