MG Rover Group's four former top executives, who withdrew 40 million pounds ($64 million) from the UK-based carmaker prior to its collapse in 2005, have been banned from serving as company directors for up to six years effective May 17, the UK government's insolvency service said.
The four were directors of MG Rover and key figures behind Phoenix Venture Holdings, a private equity firm run by ex-Rover manager John Towers, that bought the troubled company from BMW AG in 2000 for a nominal 10 pounds to save it from going out of business.
The company subsequently collapsed in 2005, resulting in 6,000 job losses and debts approaching 1.3 billion pounds. In the same year it was purchased by Chinese automaker Nanjing Automobile Corp., which later merged with SAIC Motor Corp.
Last month, SAIC began producing the MG6, the brand's first new model in the UK in 16 years, using body shells, engines and powertrains shipped from China.
"These disqualification undertakings represent a successful conclusion to a lengthy and complex investigation into the collapse of MG Rover. The outcome of this case serves as an important reminder that unacceptable conduct by company directors can result in lengthy periods of disqualification," Edward Davey, Minister with responsibility for corporate governance and company law, said in a statement.
Under the ban, former manager Peter Beale has been barred from being a director for six years, while John Towers and Nick Stephenson have received disqualifications for five years. The fourth executive, John Edwards, has been given a three-year ban.
A report conducted by a team of government inspectors in 2009 criticized the conduct of the four men in the company and said that, despite their actions being legal, they took "unreasonably large" benefits of about 9 million pounds each from the company, even though the company was making losses, the Financial Times said in a report.
"The former directors point out that they have done nothing which justifies disqualification. All of the many inquiries into the collapse of MG Rover have achieved little other than a series of massive bills," a spokesman for the men was quoted as saying in the FT.
One of the criticisms leveled at government ministers at the time was that they supported the deal, in an effort to safeguard jobs, even though the four men had limited relevant car industry experience.