DTI launches MG Rover probe

A FULL-SCALE investigation into the collapse of MG Rover began today after Trade and Industry Secretary Alan Johnson called in fraud and insolvency specialists to act as inspectors in an official inquiry into the failure of the Longbridge car maker.

Johnson has appointed Guy Newey QC, a barrister at the Maitland Chambers in Lincoln's Inn, and Gervase MacGregor, a partner with accountancy firm BDO Stoy Hayward.

Newey is a specialist in insolvency law while MacGregor, head of litigation and forensic accounting at BDO, is an expert in fraud.

Johnson called in the inspectors after being handed an initial report by the Financial Reporting Council's Review Panel on the company, which has debts of at least £1.4bn and made cumulative losses over the last half decade of more than £500m.

However, Johnson refuses to publicise the findings of the Review Panel because it is feared it might prejudice the official inquiry.

'The Review Panel report on the published accounts of the Rover Group up to 2003 raises a number of questions that need to be answered,' he said.

'The appointment of administrators on 8 April was a huge blow to the employees of the company, to their families, to MG Rover's suppliers and the local community. People want to know what happened.

'The public interest requires that issues raised by the Review Panel and developments after 2003 when the last accounts were published be investigated by independent inspectors.

'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. The Review Panel has not published its report and given my decision to appoint independent inspectors I will not be releasing it.

'I have been advised that to do so would be prejudicial to those potentially affected by it and to the regulatory process.'

Despite Johnson's calls for an early report from the inspectors, veteran DTI-watchers are not holding their breath.

Though the Review Panel delivered its report in weeks rather than months, because of the quasi-judicial nature of DTI inspectors' roles, inquiries can take years and even longer to formulate into an official report.

Inspectors' expertise

THE TWO inspectors into MG Rover, both in their 40s, are acknowledged as among the experts of their very specialist trades. London-based barrister Guy Newey has already racked up time representing the Crown as counsel to the Inland Revenue and the Charity Commission. Son of a judge and educated at top private school Tonbridge and Cambridge, Newey specialises in insolvency law.

Fraud specialist Gervase MacGregor has acted as an expert witness for much of the 19 years since he qualified as a chartered accountant. He sits on the Fraud Advisory Panel and is a member of the Association of Certified Fraud Examiners and the British Academy of Experts.