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MG Rover collapse is referred to the SFO

In a further blow for former MG Rover employees, who are awaiting payment from a £16 million trust fund, the UK government has today announced plans to refer the findings of a report into the collapse to the Serious Fraud Office (SFO). Those who recall the issue will be aware that the company was taken over by a venture capital group headed by John Towers, Peter Beale, John Edwards and Nick Stephenson.

It is alleged that the so-called "Phoenix Four" managed to extract around £40 million in pay and pension payments during the short time it was under their control and when the company went under there was a significant pension fund deficit and debts totalling £1.3 billion. It also emerged that the company received a multi-million pound UK government subsidy just weeks before the last general election in order to stop the company from going under. There have been strong accusations of political skulduggery to avoid a potentially embarrassing issue as voters went to the polls which could have cost the Labour government the last election.

The referral of the issue to the SFO will further delay the publication of the report and could again see the problem remain hidden until after the next general election.

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