AN accounting watchdog has uncovered possible evidence of wrong-doing at MG Rover, in a development that will increase pressure on ministers for a full inquiry into the disastrous collapse of the car-maker.
The Financial Reporting and Review Panel will this week tell the Department of Trade and Industry that improprieties may have been committed at Rover before it hit the buffers last month, according to The Sunday Telegraph.
The panel was appointed after Rover went into administration in early April following allegations that pounds-400m-plus could not be traced in its accounts.
Expectations that its report will contain any major revelations may be limited by the fact the panel's responsibilities may be confined to ensuring that published accounts met the relevant requirements.
However, Sir Bryan Nicholson, chairman of the Financial Reporting Council, the panel's parent, told the newspaper that officials would draw the DTI's attention to other "questions that were not directly" for the panel.
The Observer reported that the panel, whose experts have spent five weeks sifting through the accounts of MG Rover and 20 other firms, have concluded that serious issues need further investigation.
These are thought to centre on why money-making assets of the company were separated from loss-making ones and on some property transactions.
Confirmation that the FRRP had any concerns about developments at MG Rover will result in renewed calls forAlan Johnson, the recently appointed secretary of state for trade and industry, to launch a full investigation.
With Rover's problems causing devastation in its Midlands heartlands, trades unionists and MPs are expected to step up demands for the panel's report to be published.
Meanwhile, partners at PricewaterhouseCoopers, who were appointed administrators to MG Rover last month, were reported to believe that claims by Shanghai Automotive Industry Corp to have exclusive rights to make some new Rover models and engines could be challenged.
On Friday they said they had received three offers for the sports car business and two for the rest of the UK's last major car manufacturer. There was still an outside possibility that some form of car production could recommence at Longbridge.
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