The banks are protected, the airline industry is protected, and now the Phoenix Four are getting away with it. What does justice mean in Britain today? How can it be that the 4 local businessmen and the former MG Rover chief executive screwed £42m for themselves out of a company they bought for just £10 and then left it 5 years later with £1bn debts and 6,500 jobs lost, and yet not be prosecuted? How could they wipe clean incriminating computer discs, cook up a tax avoidance scheme to rake off £60m for themselves, use MG Rover’s losses to eliminate another company’s tax liabilities and thus make another £10m for themselves, pay £1.6m to a translator with whom one of the four was having an affair, support the failing car dealership of another of the four with loans not commercially justified, and yet still not be brought to court? To rub salt into the wound, the Phoenix four stand to collect a further £11.6m windfall, bringing their total gains to over £53m, from their involvement in MGR Capital, a car finance joint venture with an HBOS subsidiary now part of Lloyds TSB. How could they so comprehensively put their own interests – they expected to make £75m for themselves – before those of MG Rover and its workers, and get away with it?

The whole affair is an outrage, so why are they not being brought to book or at least forced to disgorge their unwarranted profits which should then be distributed among the workers who lost their jobs? The Serious Fraud Office’s argument is that the 850-page inspectors’ report didn’t reveal enough evidence to justify criminal proceedings. The deals uncovered were undertaken following extensive professional advice (from Deloitte and Barclays who are also thus implicated, no doubt after receiving very large commissions, in sailing close to the wind), and the SFO claimed it might not be able to prove they were fraudulent. The worst that could now happen to the Phoenix Four, we are therefore told, is that they could be disqualified as company directors, and even that is uncertain and could take years.
So what should be done? First, they should still be prosecuted. It is not the SFO’s job to decide whether or not to prosecute on the basis of their expectation of what the jury might decide; that is a matter for the jury when all the evidence is put before them. Indeed, not to prosecute the Phoenix Four sends a message to like-minded schemers in future that they may well get away with it. Second, the law needs to be changed to criminalise those who dispose of company assets in a manner clearly designed to enrich themselves rather than those who should have first call, especially employees and existing creditors, on any benefits that can be derived from the surviving assets. Third, professional advisers who use their expertise in the law, accountancy, auditing and corporate governance to advise how huge profits can be siphoned off from a company collapse in order to enhance individual enrichment rather than the public interest, should in future be held to account through a change in statute to make such anti-social behaviour illegal.

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