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Last Updated: Tuesday, 31 May, 2005, 14:18 GMT 15:18 UK
DTI to investigate Rover accounts
Bonnet of MG Rover sports car
Rover's future is far from bright
The UK Department of Trade and Industry has launched a probe into the collapse of carmaker MG Rover after questions were raised about its accounts.

The investigation follows the analysis of the Rover group's accounts for the years up to 2003 by a watchdog body, the Financial Reporting Council.

Rover filed for bankruptcy in April with debts of 1.4bn and a hole in its pension fund of 415m.

More than 5,500 workers lost their jobs when Rover stopped operating.

The government was criticised for not doing enough to help.

"People want to know what happened," said Trade and Industry Secretary Alan Johnson as he launched the investigation.

'Public interest'

Rover was sold to Phoenix Venture Holdings by German carmaker BMW for 10 in 2000

I have asked them to report to me as quickly as possible and in a form which will enable the report to be made public
Alan Johnson, Trade and Industry Secretary

The role of Phoenix's owners has come under scrutiny as it emerged that they paid millions of pounds to themselves in pension benefits and bonuses despite Rover's problems.

Rover's main pension scheme - which has more than 6,000 members - has a shortfall of some 415m.

"The public interest requires that the issues raised by the Financial Reporting Council and developments after 2003 when the last accounts were published be investigated by independent investigators," Mr Johnson said.

"I have asked them to report to me as quickly as possible and in a form which will enable the report to be made public."

Revival?

There are still hopes of reviving some production, but analysts said that the chances of that happening are very slim.

Companies and businesspeople from China, Iran and Russia have all been linked with a possible buyout of Rover, but to little avail.

A report by administrators PricewaterhouseCoopers (PwC) has shown that Rover was losing 25m a month before it declared itself bankrupt.

Creditors are expected only to get a small part of the money they are owed.

Rover's creditors include car dealers, former owner Phoenix Venture Holdings, the VAT man, pension funds and BMW.




SEE ALSO:
Rover newstracker
31 May 05 |  ssi
In pictures: A look back at Rover
08 Apr 05 |  In Pictures


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