Rover trust fund will not go to ex-workers

A £20,000 trust fund set up after the demise of MG Rover is being wound up – and not a penny will go to the 6,500 workers who were made redundant.

The remaining sum is to go to a children's charity if ex-Longbridge workers agree.

Trustees decided on the action when it became clear the £10 to £30 million pledged to the fund from former Phoenix Venture Holdings chairman John Towers was not going to materialise. The former HBOS bank had withdrawn £12.5m, saying it was owed the money.

The cash had been earmarked for workers following the collapse of the company with debts of £1.3 billion.

A High Court battle to get the money back failed earlier this year.

An appeal to the members of the Phoenix Four – Mr Towers, Peter Beale, Nick Stephenson and John Edwards – who bought the company for £10 after BMW's break up of the Rover Group, for contributions to the fund has also fallen on deaf ears.

Historian Carl Chinn, one of the four trustees who had appealed to the four to support the fund, said it was disappointing and upsetting that the workers would not get a proper payout.

Unite union official Eric McDonald, another trustee, said the Phoenix Four were the only people who had done well out of the collapse of the car maker.

The four received £42m between them over five years before the collapse.

A report in 2009 said the four had enriched themselves before the company went into administration after Chinese car giant Shanghai Automotive abandoned a planned deal with MG Rover.

The Serious Fraud Office decided not to launch a criminal investigation.

If the remaining money in the trust fund was paid out to the former workers they would receive only about £3 each.