Overheated, underpowered

Forget the slick Hollywood version, the one that oozes high-speed car chases, technobrilliance, secretive, state-of-the-art corporations out for world domination. In an example of a real-life, 21st-century business potboiler, a greedy Russian billionaire falls flat on his face, a Chinese femme fatale has a Ph.D. in metallurgy from Leeds University, and the latest corporate object of desire -- if you could call it that -- is a stodgy, down-and-out British vanmaker in Washwood Heath, Birmingham.

Last month, administrators of bankrupt vanmaker LDV Group Ltd. announced they were selling assets to a company called Eco Concept Ltd. No price was given. A spokesperson for administrators PricewaterhouseCoopers LLP said the next creditors report, which should give an idea of the amount, isn't due out for "a couple months."

LDV collapsed in April with £75 million ($122 million) in debt. The owner was Russian oligarch Oleg Deripaska through a company called GAZ OAO. GAZ bought LDV in July 2006 from a unit of private equity firm Sun Capital Partners Inc.

Once considered Russia's richest man, Deripaska has far bigger burned fish to refry than LDV. After last year's meltdown and the collapse in commodities prices, one of Russia's state banks extended Deripaska more than $4 billion in loans to stave off a margin call on a loan he used to acquire a stake in the country's giant Norilsk Nickel. The Russian government guaranteed GAZ loans in July to the tune of almost $700 million to shore up the vanmaker. Ruined fortunes -- the term is relative and Forbes magazine estimates he is still worth $3.5 billion -- and mountainous debt have forced Deripaska to sell his stake in Canadian auto supplier Magna International Inc. as well as a German construction company.

From Britain's vantage point, Deripaska is just another fallen rich guy who couldn't save the country's woeful vehicle manufacturing industry. What's attracted all the attention is LDV's buyer. Heretofore unknown, Eco Concept is owned by Qu Li Ph.D., according to a company statement. That's where the fun starts.

In a remarkable bit of unfortunate timing, Li's name and photo had been plastered in the British press just days before because of another failed vehicle concern. In September, the government's Department for Business Innovation and Skills released a report on the 2005 collapse of MG Rover Group Ltd. The report ran to almost 900 pages, took years to produce and cost the taxpayers £16 million to £18 million, depending on whose figures you take. At least in titillation terms, Li, 45, was a central character.

According to the report, Li was hired in 2004 as a consultant to the car group, which had embarked on a quest to establish a joint venture with Chinese auto manufacturers. In 2000, BMW AG sold the loss-making MG Rover for basically nothing to Phoenix Venture Holdings Ltd., whose owners-directors were commonly known as the Phoenix Four. One of those was Nick Stephenson.

As the report spelled out in dry, bureaucratic language on page 567, "an intimate relationship arose between Dr. Li and Mr. Stephenson." Both the players involved described to investigators the "intimacy" as temporary. The report quotes Li as saying: "There was intimacy on an 'intermittent occasional' basis over maybe 'a couple of months.' "

Needless to say, the British press had a field day. "Rover director's mysterious lover," screamed the Daily Mail.

No matter how inconsequential the fling was, investigators implied a quid pro quo. The report criticized Stephenson for authorizing a £740,000 success fee to Li for the £37 million sale of engine and drive-train technology to Shanghai Automotive Industry Corp., or SAIC. The December 2004 sale was seen as the first step in a £370 million joint venture that would bring Rover to China and desperately needed capital to the automaker.

Li would eventually garner some £1.7 million for her consultancy work. The report slammed Li as grossly overpaid.

Talks with SAIC fell apart in April 2005, and MG Rover went bust. Squabbling continues about who is responsible. Creditors ended up eating £1.29 billion in liabilities. Another Chinese automaker, Nanjing Automobile Group Corp., acquired some Rover technology and machinery in 2006 for £53 million, shipped them to China and began making MG sports cars. Nanjing Auto and SAIC merged in 2007. Li's father was Nanjing Auto's former chief engineer.

An Eco Concept executive announced that his company will move operations to the West Midlands and make specialty vans. According to British press reports, Li now lives in a fancy farmhouse with an executive of yet another British car company, Bentley Motors Ltd. Uh-oh.