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DTI launches MG Rover enquiry

A full investigation into the collapse of MG Rover has begun after the Department of Trade and Industry secretary Alan Johnson called in fraud and insolvency specialists to act as inspectors in an official inquiry.

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 five years of more than £500m.

Johnson has refused to publicise the findings of the review panel in order to keep the enquiry ‘prejudice free’.

“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.

“The appointment of administrators on April 8 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,” says Johnson.

“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.”

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