Weekly Blog by Philip King, CEO of the ICM - 'Better late than never!'

The news about the 'Phoenix Four' received much coverage in the weekend's press and I was reminded of the events and mismanagement that had drifted out of my consciousness in the six years since the collapse of MG Rover. There can be no doubt that the combined 19 years disqualification is justified but questions remain. Dominic O'Connell writing in the Sunday Times last weekend said:

'That should not be the end of the matter. MG Rover's demise left £1.3 billion of debts and made 6,000 unemployed. At the time of its collapse, the Phoenix Four said they would put the remaining assets that were not caught in the collapse into a trust for the workers. They have not. The company's pension scheme has been forced into the state lifeboat fund, with a cap on payouts to retirees. The offshore trust set up to take the retirement benefits of the four has not done so. The Pensions Regulator should speed up its investigation into the status of that trust - six years is already far too long. The Financial Reporting Council must now look at the accounting issues thrown up by the collapse, in particular a little known aspect of the affair, the role played by Deloitte. The official inquiry found the accountancy firm made £30 million in fees in the five years the Phoenix group ran MG Rover. Maghsoud Einollahi, a partner in Deloitte's corporate finance division, had such a close relationship that questions were raised over whether he was a "shadow" director. Vince Cable, the business secretary, must also defend the decision to take no action against Kevin Howe, MG Rover's chief executive.

For those who lost their jobs, I'm sure the events of 2005 remain as vivid as ever and they will want to see answers to the questions raised by Dominic.

The whole debacle reminds me of how lightly the directors of some businesses take their responsibilities and credit professionals should do everything they can to ensure they are called to account. That is why, in the press release accompanying our response to the recent Insolvency Service consultation: http://www.icm.org.uk/home/icm-news/513-icm-calls-for-radical-change-to-ip-regulatory-framework, we encouraged credit professionals to engage actively in the insolvency process. Even when it might seem futile, we need to play our part in seeing the right - and best - outcome is achieved.