Phoenix agrees to let union experts examine Rover books

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The Independent Online

Phoenix Venture Holdings, the owner of the MG Rover car company, will allow trade unions to send in financial experts to examine the structure of the company and a number of controversial boardroom payments, to allay fears of asset-stripping.

The offer came during a five-hour meeting at the Longbridge car plant on Wednesday night between John Towers, the Phoenix chairman, and trade union officials at which a number of concerns were raised over executive salaries, pensions and loans, and the financial restructuring of the business.

Mr Towers, the former Rover chief executive who led the purchase of Rover from BMW three years ago for a token £10, "categorically denied allegations of asset stripping", the unions said.

A spokeswoman for Amicus, one of the two unions at the meeting which ended in the early hours of yesterday morning, described the outcome as "positive".

The other union at the meeting, the Transport and General Workers Union, said: "Our officers could comprehend the explanations given to them by Phoenix up to a point, but for a full understanding we need to have the involvement of our own financial experts. We will move to do this fairly swiftly." She said it had not yet been decided whether the experts would be from an independent firm of accountants or from within the unions.

A Phoenix spokeswoman described the meeting as "useful and productive".

The experts will examine the terms of a £10m loan note given to the four Phoenix directors by Phoenix Venture Holdings in return for an agreement to hand 60 per cent of the shares over to trusts representing employees and dealers.

They will also review a £13m payment made by Phoenix into a trust fund set up for the benefit of its four original directors and a fifth director, Kevin Howe, the chief executive of MG Rover.

The payment has caused particularly resentment as it came at the same time as the company's pension fund was £73m in deficit.

A further cause for concern is the deal which the four Phoenix directors did to buy MG Rover's lease financing arm from BMW, separating the loss-making car manufacturing operations at Longbridge from the cash flow generated by the lease business.