"Amid mounting anger last night among more than 5,000 workers facing redundancy, it emerged that the so-called "Phoenix Four" directors, led by John Towers, are the biggest creditors to MG Rover. This means that the directors, who have already made about £40m from the company after buying it for £10 each, will have the largest claim to any proceeds raised from the sale of the carmaker's assets, PricewaterhouseCoopers, the administrator, confirmed."
Tim Worstall, via the Torygraph:
"Those figures neatly match interest payments made by MG Rover on "loans from group undertakings" (of £10.9m in 2003 and £10.1m in 2002). Another note reveals that MG Rover had loans from "group undertakings" of £411.5m in 2003 and £391.5m the previous year.
Anyway, these interest payments meant that - while MG Rover was heavily loss-making - Techtronic made a pre-tax profit of £11.6m in 2003 and was proposing to pay dividends of £32.5m. The previous year it made a similar profit and paid dividends of £18m.
Seems pretty clear there, eh? Someone lends you half a billion interest free and you then loan it on with interest. Do that for a few years and you’re pretty wealthy.
The Yorkshire Ranter, November 13th 2004:
"Another interesting fact is that BMW loan. The loan was made, free of interest, to Techtronic. Techtronic disburses it as required to MG Rover. But Techtronic charges MG Rover interest on it, interest that presumably benefits only the Techtronic shareholders."
We don't report the news, we write it...
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