DIRECTORS of MG Rover, the collapsed carmaker, yesterday rejected a call by Gordon Brown for them to give some of their £40 million pay and pension rewards to its workforce.

A spokesman for their company, Phoenix Venture Holdings (PVH), said: “The directors have given the assets of PVH to a trust which will be administered independently for the benefit of the workforce. They have already put in considerable assets. Their position has not changed from that.”

The rebuff to the Chancellor came as John Towers, the controversial chairman of the company, understated his own salary by more than £100,000 in an interview with a Birmingham newspaper.

Mr Brown added to calls for directors to contribute to paying the workforce as MG Rover served the first of thousands of redundancy notices on employees.

The directors’ snub to Mr Brown came as Sir Bryan Nicholson, chairman of the Financial Reporting Council, confirmed that he would head an investigation in to MG Rover’s accounts. Sir Bryan told The Times yesterday that the car company appeared to have a complicated accounting structure. He said that the investigation would start with the accounts but could be widened by other regulatory authorities if it was thought necessary.

Sir Bryan was called in by the Government amid concern that hundreds of millions of pounds may be missing at the collapsed company. This concern has been dismissed by MG Rover. Mr Towers said: “This is a simple issue of addition and subtraction that even a child of seven could cope with.”

Terms of reference for the inquiry into MG Rover’s finances will be set out this week, although the Conservatives and the Liberal Democrats said yesterday that the inquiry should go beyond accountancy and look at the role of the Department of Trade and Industry in monitoring the company.

PricewaterhouseCoopers, the administrator, has indicated that MG Rover is likely to have liabilities of about £1 billion. This is thought to include the £500 million long-term loan from BMW, £400 million in pension liabilities and money owing to creditors. HBOS is thought to be heavily exposed to debts from MG Rover because it had a car finance joint venture with the company.

Work will begin this week on finishing about 1,000 half-built cars that seem likely to be the last Rover cars made as administrators try to maximise the value of the assets.

However, the dealers that have ordered the cars are likely to demand big cuts in price. Richard Cort, head of the Rover Dealership Association, said: “These cars don’t have the three-year warranties that previous vehicles had, and so that will have to be taken into consideration.”

Tesco, the supermarket chain,has said it is interested in building a supermarket on part of Rover’s Longbridge factory site.

TOWERS 'CUTS' HIS SALARY

John Towers attempted to defend his pay yesterday in an interview with Birmingham’s Sunday Mercury newspaper: “My annual salary has been £200,000 and the pension I will get is £105,000, not the £16 million reported.” However Mr Towers said last year that his director’s salary was £280,000. On top of that he receives £37,000 for his role as chairman, making the total £317,000. A spokesman for Phoenix Venture Holdings said: “He must have made a mistake, his salary is, as reported, £275,000 plus £37,000. There has been no change to that. I can’t explain why he got it wrong.”

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