DTI Report into MG Rover

    Share
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    DTI Report into MG Rover

    Post by patpending on Sun Sep 13, 2009 3:04 am

    I'm planning to read it today... wish me luck! Wink

    (starts reading - finds that, although there are over 800 pages, the first text is on p20...and that's the introduction!) Wink
    avatar
    Windy
    Admin

    Number of posts : 3322
    Points : 4244
    Reputation : 165
    Registration date : 2009-02-02

    Re: DTI Report into MG Rover

    Post by Windy on Sun Sep 13, 2009 3:58 am

    patpending wrote:I'm planning to read it today... wish me luck! Wink

    (starts reading - finds that, although there are over 800 pages, the first text is on p20...and that's the introduction!) Wink
    Good luck!

    I found some blank pages - not very good value at ~£20K each!
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Sun Sep 13, 2009 4:02 am

    It's hard going. I'm making notes for 1) jokes and 2) content.

    How about this:

    pI/22 In the case, however, of the individuals we interviewed from the Chinese automotive group (“SAIC”) with which the Group was in negotiations in 2004 and 2005, the interviews were formal but not under oath since it was not appropriate for us to administer oaths in China, where the interviews took place.


    Last edited by patpending on Sun Sep 13, 2009 6:34 am; edited 1 time in total
    avatar
    Windy
    Admin

    Number of posts : 3322
    Points : 4244
    Reputation : 165
    Registration date : 2009-02-02

    Re: DTI Report into MG Rover

    Post by Windy on Sun Sep 13, 2009 4:18 am

    I started at the point the SAIC talks broke up and worked backwards, so far I drawn the conclusion that the company failed because they ran out of money (and time, which is the same thing) shortly after "the Secretary of State decided, following discussion between DTI officials, Mr Norris and the Treasury, that the Group should be sent a short letter stating that at that stage a Government loan facility was unnecessary", even though all the accountants were saying that ~£120m was required for long term success!
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Sun Sep 13, 2009 6:41 am

    I had a problem editing my post. Now it's worked.

    pI/22 In the case, however, of the individuals we interviewed from the Chinese automotive group (“SAIC”) with which the Group was in negotiations in 2004 and 2005, the interviews were formal but not under oath since it was not appropriate for us to administer oaths in China, where the interviews took place.

    The post I wanted to make said: "Their sponsor (the DTI) has re-branded twice during the course of the project (with new bosses including Mandelson) meaning the point of the investigation has long been forgotten.

    And: not to be able to get reliable gen from SAIC means that the environment in which they are working is akin to putting £1,000 in used £20 notes in a jar in an unsupervised office kitchen with no surveillance, marked "£20 notes in here", putting £20 into it every week (without checking the contents), and reaching some kind of conclusion as to what amount should still be in there after four years, let alone two months or two weeks..."
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Sun Sep 13, 2009 2:02 pm

    what the report does say is making me feel that, in supporting MG Rover for the first half of the decade, I may have had a different view of its prospects from that of its directors!

    Their own accountants reportedly said in 2000 that the business was intrinsically valueless...

    ...only 100 pages managed, 700+ to go...
    avatar
    richardk

    Number of posts : 935
    Points : 1149
    Reputation : 46
    Registration date : 2009-02-06
    Location : Norfolk

    Re: DTI Report into MG Rover

    Post by richardk on Mon Sep 14, 2009 12:04 am

    Well done - keep om at it...I'm waiting for a touch of insomnia before I was to start reading it
    avatar
    Windy
    Admin

    Number of posts : 3322
    Points : 4244
    Reputation : 165
    Registration date : 2009-02-02

    Re: DTI Report into MG Rover

    Post by Windy on Mon Sep 14, 2009 9:41 am

    Remember the farmhouse at Studley Castle:



    The home and workplace of Dr Qu Li:




    Dr Qu Li was paid more than £1.6million as a consultant by the British car firm – at the same time as she was having an affair with one of its directors.

    Dr Qu Li was paid £1.69 million GBP for her services at MG Rover


    Her company website boasts of its expertise in global acquisitions, business planning and contract negotiation.

    But a damning 850-page Government report criticises the large fees paid to her and attacks MG Rover directors, who awarded themselves huge salaries while overseeing the firm’s demise in 2005.

    The report also reveals how Dr Li, 45, was having an ‘intimate relationship’ with MG Rover director Nick Stephenson, 61.

    The consultant was paid for just 15 months of work as MG Rover tried, unsuccessfully, to negotiate a business deal with the Chinese motor industry to save the 110-year-old car giant. In the end it went bust with the loss of 6,300 jobs.

    The Government’s report goes into great detail about the affair between Dr Li and Stephenson, who earned almost £9million in wages and benefits during the five years he helped to run MG Rover.

    The report attacks the so-called Phoenix Four for the way they managed MG Rover. They took over the ailing car firm in a dramatic rescue bid in 2000.


    The four directors – Stephenson, John Edwards, 57, Peter Beale, 54, and John Towers, 61, paid themselves nearly £36million during the five years they ran the company.

    According to the report from the Business Department, Dr Li – who lives in a sprawling farmhouse in Studley, Worcestershire – and Mr Stephenson had tried to play down their relationship.


    While Dr Li claimed there was intimacy on an ‘intermittent’ basis over maybe ‘a couple of months’, Mr Stephenson said the relationship started in early 2004, but was ‘dead and buried – probably – towards the end of that year’.


    Dr Li and Stephenson played a key role in the negotiations with Chinese businesses and regularly travelled to China together.



    Nick Stephenson was allegedly having an ‘intimate relationship’ with Li.


    One witness told the department’s investigators ‘when she was in China in the early part of 2005 there was “lots of speculation” about the relationship between Dr Li and Mr Stephenson’.


    The report added: ‘It is, perhaps, also noteworthy that the relationship was such that MG Rover engineers observed the closeness of the two on a trip to China in, probably, the second half of 2004.’


    The Business Department questioned why Dr Li had been paid such large sums for her role.


    The report says there was no attempt to find out the market rate for such services or whether anyone else could have done the job, concluding: ‘Our own view is that the sums which the group paid... were... much too high.’
    http://www.dailymail.co.uk/news/article-1213101/Dr-Li-1-6m-lover-shamed-Rover-boss.html

    "Dr Qu Li was paid £1.69 million GBP for her services at MG Rover"

    Presumably it was her company that was paid the money, not her personally, and that is not actually a particularly high rate for a consultant - Witch hunt?
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Mon Sep 14, 2009 11:27 am

    I've got a copy of Saturday's Daily Mail coverage - far more interesting than the report - "SEX, LIES and POTS OF CASH" it says.

    Here's a couple of bits from the first 100 pages of the report:

    V/6.2 Mr John Millett Mr John Millett became finance and strategy director. Mr Millett was not a qualified accountant but had a background in finance and by May 2000 had worked for MGRG and its predecessors for just under 30 years. At this time Mr Millett held the position of joint finance director of the sales and marketing division of BMW Group UK. After Techtronic’s acquisition of MGRG, Mr Millett became finance and strategy director.

    V/31 We asked Mr Parsley [Sunday Times journalist] about the basis for these articles. He declined to reveal his sources, but asserted that he had a proper basis for the articles. However, we find it hard to believe that there was any solid basis for the articles.

    V/26 The form sent to Companies House to record his appointment on 15 October 1998 as a director of Belgrave Projects Limited, which Mr Parker signed, named him as “Lord” Brian Parker. Although Mr Parker told us that this was a “mistake”, we find it difficult to believe that he did not notice this error at the time.


    V/39 Mr Parker also told us in interview that:

    he had not taken part in the conversation with Mr Towers on 26 October 2000, of which there is a tape-recording as noted at paragraph 34 above.

    V/40 In our view, Mr Parker was untruthful in some aspects of his evidence to us....
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Mon Sep 14, 2009 1:21 pm

    Windy wrote:Remember the farmhouse at Studley Castle:



    ...

    V/92 Further, Studley Castle was transferred to Studley Castle Limited, a subsidiary of PVH, at a price of £2.8 million.
    that's only p113. Haven't got to the farmhouse yet...
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Tue Sep 15, 2009 1:55 pm

    Well, just about to start section ten, that's 300 pages in to the first one.

    Just having read four pages about the heritage companies in which they list them out, then say "but nothing really happened here" (surprise!) I suddenly got the impression the report-writers are not very clear as to their purpose and are working in a very unclear environment anyway.

    Mind you, at £20,000 a page, I reckon anyone might be tempted to copy out the phone book to check if anyone had been bothered to read that far...
    avatar
    Windy
    Admin

    Number of posts : 3322
    Points : 4244
    Reputation : 165
    Registration date : 2009-02-02

    Re: DTI Report into MG Rover

    Post by Windy on Wed Sep 16, 2009 3:42 am

    patpending wrote:
    Windy wrote:Remember the farmhouse at Studley Castle:



    ...

    V/92 Further, Studley Castle was transferred to Studley Castle Limited, a subsidiary of PVH, at a price of £2.8 million.
    that's only p113. Haven't got to the farmhouse yet...
    Well rumour suggests that when you do get there you may find some LDV vans on their way to China!

    Dr Li buying LDV

    The Chinese ex-lover of shamed Phoenix Four director Nick Stephenson has emerged as a potential takeover bidder for stricken Birmingham van manufacturer LDV.

    But the takeover could mean the death-knell for van-making in Birmingham, with a “lift and shift” operation to China on the cards if Dr Qu Li seals the deal.

    Dr Li, whose affair with the former Rover boss was exposed in the Government inquiry report into the collapse of Longbridge, refused to deny she was in the frame for the Washwood Heath factory.

    She said: “I’m sorry, I cannot help you. I have nothing to say on this matter at all.”

    Reports claimed that Dr Li, who was paid £1.7 million for consultancy work with MG Rover over a 15-month period, could seal a takeover at Washwood Heath as early as Wednesday this week.

    Dr Li’s China Ventures operation is said to be the only bidder left in exclusive talks with LDV administrators PricewaterhouseCoopers after claims that Malaysian group Weststar has finally walked away.
    avatar
    Windy
    Admin

    Number of posts : 3322
    Points : 4244
    Reputation : 165
    Registration date : 2009-02-02

    Re: DTI Report into MG Rover

    Post by Windy on Wed Sep 16, 2009 8:47 am

    PS If you don't find the LDV vans at Studley, they may be in Longbridge!

    Sources described Dr Li as “probably the most influential Chinese business person in the UK with contacts in very high places” – and suggested she could move the van-maker to Longbridge if the takeover succeeds.
    http://www.birminghampost.net/birmingham-business/birmingham-business-news/automotive-business/2009/09/16/mg-rover-report-missed-importance-of-dr-qu-li-say-phoenix-four-65233-24703838/
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Wed Sep 16, 2009 3:40 pm

    Well, I've read the 438 pages of the first half.

    You may judge for yourselves how incisive the insights are from this description of the facelift:

    With no sign of the New Medium Car, many of MGRG’s existing models were updated during 2004. The design of the Rover 45 was updated by changing the car’s headlamps, adding new rear and front bumpers and a different engine, the Rover 25 was remodelled, introducing new headlamps, tailgate, facia, badges and revised suspension and electrics, and the design of the Rover 75 was updated, receiving new bumpers, lights, wheels, interior trim and colours. As with the redesign of the Rover 25 and Rover 45, the changes made to the Rover 75 were of a cosmetic nature. 47. In addition, MGRG began selling the MG Rover SV (“MG SV”), which was based on the Qvale Mangusta sports car, the rights to which were acquired in July 200139. The MG SV had a starting price of about £65,000. However, in 2004 (its first year of production) only four were sold, and its manufacture was very labour intensive, which contributed to a high cost base. Also in 2004, a new version of the MG ZT was introduced based on the updated Rover 75 model. Further, MGRG decided to reduce the price of the CityRover and added more equipment to the car in an attempt to increase sales. The improvements were due to be introduced into production in three phases starting on 18 February 2005, and the sales price was to be reduced (by between £500 and £900 depending on the exact model).

    It's interesting what the report reveals. A shambolic structure designed to maximise returns to a small group of people rather than to the wider stakeholders - complexity where transparency and openness were needed - vast sums squandered on an exercise of doubtful worth - that's the report, what happened at MGR might have been similar!

    The terms of reference within which the report was operating were clearly very loose and ill-defined. Far too much of the report is like copying out a shopping list, e.g, where the group structure is concerned, there are pages and pages. There are easily four pages about the Heritage companies which amount to a list. A £20,000 a page list!

    See also above - obviously one "witness" said he had never attended a meeting the inquiry had on tape!

    The poor report structure gives you no clue where things are going. However, I believe I have found a summary on "why did PVH control so much outside MG Rover Group?" (I hadn't realised the P4/5 controlled holding companies separate from MGR Group) - section XV from p406.

    The following believed MGR was likely to go down the pan:


    • B*W
    • MGR's accountants Deloitte's
    • MGR's lawyers (Evershed's?)
    • the Phoenix consortium when creating share classes IIRC
    • Barclays Bank

    It's all very sad and grey really.

    The last page of Part I is a hoot, though. £80!
    avatar
    Windy
    Admin

    Number of posts : 3322
    Points : 4244
    Reputation : 165
    Registration date : 2009-02-02

    Re: DTI Report into MG Rover

    Post by Windy on Thu Sep 17, 2009 12:25 am

    Whatever structure was set up, it was set up under the advice of the accountants etc. What is more important is what the directors did to try and make a success of the business, hopefully part 2 will be more interesting...

    As for your quote, I thought they also updated the ZS and ZR in 2004, not just the Rovers and ZT! And what was the 2004 Rover 45's "different engine" "of a cosmetic nature"? I cant remember any new engines in 2004...

    And although they criticise the MG SV, wasn't MGS&R about the only part of the business actually making a profit?

    Those "incisive insights" appear to show a complete lack of interest in the subject, I wonder what car the author drives, if any?
    avatar
    Windy
    Admin

    Number of posts : 3322
    Points : 4244
    Reputation : 165
    Registration date : 2009-02-02

    Re: DTI Report into MG Rover

    Post by Windy on Thu Sep 17, 2009 12:33 am

    patpending wrote:The last page of Part I is a hoot, though. £80!
    I think the font size is carefuly chosen so that the part of the page it covers does indeed cost that amount!
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Thu Sep 17, 2009 2:43 pm

    Windy wrote:...I wonder what car the author drives, if any?
    he's just bagged his share of £16m, do you expect him to drive his own Roller?
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Thu Sep 17, 2009 2:44 pm

    Windy wrote:
    patpending wrote:The last page of Part I is a hoot, though. £80!
    I think the font size is carefuly chosen so that the part of the page it covers does indeed cost that amount!
    Couldn't possibly get that small. I think it would need to be a microdot! Wink
    avatar
    Windy
    Admin

    Number of posts : 3322
    Points : 4244
    Reputation : 165
    Registration date : 2009-02-02

    Re: DTI Report into MG Rover

    Post by Windy on Fri Sep 18, 2009 12:29 am

    patpending wrote:
    Windy wrote:...I wonder what car the author drives, if any?
    he's just bagged his share of £16m, do you expect him to drive his own Roller?
    I got the impression that bit was written by a student trainee living in the middle of London, probably female with no car...
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Fri Sep 18, 2009 7:03 am

    Windy wrote:
    patpending wrote:
    Windy wrote:...I wonder what car the author drives, if any?
    he's just bagged his share of £16m, do you expect him to drive his own Roller?
    I got the impression that bit was written by a student trainee living in the middle of London, probably female with no car...
    certainly written by someone with no interest in cars - "not a car person" - did Deloitte's recruit youngsters from Alchemy?
    avatar
    ZTsteve

    Number of posts : 111
    Points : 100
    Reputation : 6
    Registration date : 2009-02-19
    Location : Sussex

    Re: DTI Report into MG Rover

    Post by ZTsteve on Thu Sep 24, 2009 2:58 am

    I'm still struggling through part II. One thing that has struck me is the things they have not mentioned, like the money spent on RDX60. And only one brief mention of TWR on page 410.
    avatar
    Windy
    Admin

    Number of posts : 3322
    Points : 4244
    Reputation : 165
    Registration date : 2009-02-02

    Re: DTI Report into MG Rover

    Post by Windy on Thu Sep 24, 2009 4:31 am

    ZTsteve wrote:I'm still struggling through part II. One thing that has struck me is the things they have not mentioned, like the money spent on RDX60. And only one brief mention of TWR on page 410.
    I'm still on part II, even though that is were I started!

    Just read the description of Dr Li's extensive qualifications and experience within Chinese industry and government, was just thinking how difficult it would be to find someone better qualified for the job when I then read the bit where they suggest she should have been paid a rate suitable only for an experienced translator! I think maybe they don't appreciate the problems of Chinese goverment regulation - which is what actually killed the deal in the end!
    avatar
    ZTsteve

    Number of posts : 111
    Points : 100
    Reputation : 6
    Registration date : 2009-02-19
    Location : Sussex

    Re: DTI Report into MG Rover

    Post by ZTsteve on Thu Sep 24, 2009 11:02 am

    Windy wrote:I think maybe they don't appreciate the problems of Chinese goverment regulation - which is what actually killed the deal in the end!

    Yes, that clearly had a big part to play.

    Although I haven't finished reading it yet, so far I have to admit some of the financial transactions look suspect...
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Fri Sep 25, 2009 1:43 am

    ZTsteve wrote:...Although I haven't finished reading it yet, so far I have to admit some of the financial transactions look suspect...
    I can't help feeling that was the report's hidden brief....(!)
    avatar
    patpending

    Number of posts : 3005
    Points : 3948
    Reputation : 53
    Registration date : 2009-02-05
    Location : Surrey

    Re: DTI Report into MG Rover

    Post by patpending on Thu Nov 12, 2009 7:35 am

    Can't believe it's two months since I read half of this report, and the half I haven't read (yet) is the interesting one.

    Thinking about the large value leasing deal mentioned in the report, I just read that accounting standard setting supremo Sir David Tweedie says that his ambition is to fly on an aircraft that is on the airline's balance sheet before he dies.... (Rover was not unusual!)

    Sponsored content

    Re: DTI Report into MG Rover

    Post by Sponsored content


      Current date/time is Mon Jun 26, 2017 8:32 pm