Whitehall worried about Deripaska link to Magna

Concerns are growing in Whitehall over links between Oleg Deripaska, the billionaire Russian oligarch, and the consortium set to rescue Opel and Vauxhall, the European arms of General Motors (GM).

GAZ, Mr Deripaska's automotive group, owned the Birmingham van maker LDV when it nearly collapsed earlier this year, before selling it to the Malaysian vehicle importer Weststar. Mr Deripaska's businesses have been badly hit by the credit crunch, and he was one of the first Russian entrepreneurs bailed out by the Kremlin.

Despite these difficulties, GAZ has teamed up with the Canadian car parts firm Magna and Russian bank Sberbank in their proposed takeover of Opel and Vauxhall. GAZ would make Opel vehicles in Russia, while Magna has vowed to invest up to €700m (£610m) in Opel.

On Friday, the consortium reached a tentative agreement with GM, which is likely to file for Chapter 11 bankruptcy in the US tomorrow. The British government was desperate for a deal to save 5,500 jobs at plants in Luton and Ellesmere Port.

A Whitehall source said that advisers expressed their concern to the Department for Business, headed by Lord Mandelson, over Mr Deripaska's involvement. The source said: "At least one has raised this issue with the Government. How can we deal with a man who has just gone and dumped LDV? He's had financial problems, so where has the money come from?"

Richard Howitt, the east of England MEP who represents Luton, said: "We have to be sure that any deal has full transparency so that the bidder is not given carte blanche to asset strip. We must get guarantees on both production and jobs."

In the US, President Barack Obama will promise tomorrow that he has no intention of taking over responsibility for the day-to-day running of the US car industry. The government will emerge with more than 70 per cent of the shares in GM following Chapter 11.

With the delicate negotiations over GM's future continuing into the weekend, the White House is concerned about how best to present the most significant interventions in industry by the federal government in more than a generation. Fritz Henderson, who was promoted to chief executive when GM's previous boss, Rick Wagoner, was sacked by Mr Obama in March, is hosting a press conference tomorrow in New York. In Detroit on Friday, leaders of the United Auto Workers union announced their members' vote to accept significant cuts to healthcare and retirement benefits.

White House officials have been insisting that day-to-day control of the company will rest with executives. "There obviously is a balancing act," White House spokesman Robert Gibbs said on Friday. "While not running an auto company on a day-to-day basis, obviously there will be concern about investments by the taxpayer as there should be and those are issues that as part of this restructuring will be worked on."

Start your day with The Independent, sign up for daily news emails
Life and Style
food + drink
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
News
UK Border Control
i100
Arts and Entertainment
TV
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Guru Careers: Inbound Sales Executive

£18k + Uncapped Commission (£25k Y1 OTE): Guru Careers: We are seeking an Inbo...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn