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The total cost of the collapse of MG Rover could be over £600 million, according
to a report published today by the Public accounts committee.
The committee also criticises the Government for being too distant from the
company before its collapse.
The committee found that, although responsibility for MG Rover's commercial
management rested with the directors of parent company Phoenix Venture Holdings,
the DTI knew in 2000 that the company would face difficulties in the longer term
without a strategic industrial partner.
MG Rover was in talks with Shanghai Automotive Industry Corporation when it ran
out of money on the eve of the general election on April 15 2005.
As a result, the company entered administration with the loss of 6,100 jobs.
Edward Leigh MP, the committee's chairman, explained: "The decline of MG Rover
between 2000 and 2005 and the final collapse of the company have cost the
taxpayer some £270m.
"The truth is that the DTI had never managed to get close enough to the company
to develop comprehensive plans for this kind of scenario and found itself trying
to catch up with a rapidly developing situation."
Source:
RedAlert
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