A senior director of MG Rover bought off-the-shelf
computer software to destroy critical financial documents the day
after the government appointed inspectors to investigate the
company's collapse.
Peter Beale, one of the Phoenix 4, the group brought in to
rescue the troubled car maker, used file deletion software to deep
clean the hard disk of his laptop, it was revealed today.
His actions made it impossible for investigators to recover
sensitive documents which may have shed light on the collapse of
the company, according to an
830 page report on
the affairs of Phoenix Venture Holdings Limited, MG Rover Group
Limited.
The disclosures follow a 4 year investigation into the company
which collapsed with the loss of 6,500 jobs in 2005 owing creditors
nearly £1.3 billion. The report criticises Beale, and 3 other
directors of Pheonix Venture Holdings for awarding themselves pay
and pensions worth £42 million, which were "out of all
proportion".
Investigators relied heavily on computer evidence during the £16
million inquiry. Forensic investigators took images of hard disks
from the group's servers and over 100 computers used by company
staff.
The inquiry found Beale bought a single license for a copy of
software known as
Evidence
Eliminator the day after the enquiry was announced.
The software, according to advertisements, is "designed, tested,
and proven to defeat the forensic analysis equipment used by police
and government agencies".
Beale used the package to delete ten documents in a folder
called "MG Rover" on his desktop computer, investigators found.
One document included details of the income and benefits
received by MG Rover Chairman John Towers. Others contained details
of the net assets belonging to other MG Rover directors.
Nine of the documents were likely to have been created to secure
a government loan or contained accounting information relation to a
company under investigation, according to the report.
"It appears to us that all ten documents are likely to have
related to one or more of the companies under investigation and to
have been relevant to the investigation," it says.
The report calls into question the explanations Beale gave to
inspectors over his use of the software package, concluding that
Beale gave
"untruthful evidence".
Beale told investigators in an interview that any suggestion
that there was a link between him buying Evidence Eliminator and
the Department of Trade and Industry was "absolutely false".
"I had no concept at the time of what the DTI investigation
would look like and I was subsequently absolutely astounded that
such things would even be looked at, such as my own laptop," he
said.
However, comments made by Beale in a draft witness statement
give a different explantion, the report says.
Beale wrote, "When I heard that the Inspectors had been
appointed I thought that there might be a possibility that the
Inspectors would want to view documents on my laptop as part of the
investigation process...
"I decided that I would delete personal documents from my laptop
as I did not want the personal documents on my computer to be
viewed by those conducting the investigations into the PVH Group's
affairs.
"I realised that, even though I had deleted my personal
documents, there was a possibility that the Inspectors might use
some form of forensic technology to recover deleted items and that,
if they did, they might recover some of my personal documents."
Beale told interviewers that he used programs to clear up his
disk on a regular basis and did not buy the software "to suddently
delete lots of things".
Investigators were unable to find traces of these programs on
his laptop and have called into question Beale's claims that the
documents he deleted were personal rather than business
related.
| Untruthful evidence |
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The report states: We consider that Mr Beale gave untruthful evidence during his
interviews that: - There was no connection between our appointment and his
installation of Evidence Eliminator
- He had "no concept at that time [i.e. in June 2005] of what the
DTI investigation would look like" and, in particular, was unaware
that in the course of our investigations we might examine his
computer
- He could not recall the sequence of events between his learning
of our appointment and the purchase, installation and running of
Evidence Eliminator
- He behaved no differently in June 2005 to any other time as he
had, in previous years, routinely used programs to "clean up [his]
disk" and, in particular, did not acquire software "to suddenly
delete lots of things on [his] computer"
- He had not deleted from his laptop any documents relating to
the companies under
investigation
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