BMW chief fuels row over £13m trust fund for Rover directors

The chairman of BMW has waded into the row over the £13m trust fund which the directors of the Phoenix consortium have built up since buying MG Rover from the German car company for a token £10.

Helmut Panke, who was finance director of BMW at the time of the Rover deal and signed off the £500m dowry that went with the sale, said: "If the impression is given of a small group of individuals benefiting more than the entire workforce, then that is bad."

He added that the basis on which BMW sold the business to the Phoenix consortium, led by Rover's former chief executive John Towers, was that the car maker would be kept going with "equal contributions from all groups".

The disclosure of the trust fund came just weeks after MG Rover reported a loss of £95m for 2002 and has provoked uproar among local politicians and unions at the Longbridge plant in Birmingham. The beneficiaries of the trust are Mr Towers and the four other directors of Phoenix Venture Holdings, Nick Stephenson, Peter Beale, John Edwards and Kevin Howe, MG Rover's chief executive.

Mr Panke said the key to MG Rover's future would be the development of a new medium-sized car, which has now been put back by a year following the collapse of the China Brilliance joint venture.

However, he refused to be drawn on whether Rover would survive in the longer term. "It is a difficult situation, I have to consult my lawyers first," he joked, before adding: "You cannot quote me on the record as saying it has no future."

Mr Panke, who was in the UK for the annual BMW (GB) press dinner, also spelt out his ambitious plans for the Mini which he foresaw being produced in a whole range of formats. Sales this year will hit 170,000 against forecasts of 100,000 and BMW will shortly introduce a convertible version.

BMW's plans for the Mini would suggest a major investment in capacity at its Oxford plant. But Mr Panke said an extra 40,000 to 50,000 cars could be built in the existing facility by extending the length of shifts and making small incremental investments.

Comments