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Britain Accepts Rover Ruling

29 June 1990

NEW YORK TIMES

Britain said today that it had accepted a judgment by the European Community's Executive Commission against the Government's aid to British Aerospace P.L.C. in the sale of the state-owned Rover automobile group. Trade Secretary Nicholas Ridley said that although the Government disagreed on some details of the community's rulings, it would support the community's jurisdiction in the matter.

The commission ruled in Brussels on Wednesday that the British Department of Trade and Industry had illegally granted aid of $:44.4 million, or $77 million, when it sold Rover to British Aerospace for $:150 million, or $261 million, in July 1988. The commission, which seeks to enforce fair competition in the European Community, decided the ''sweeteners'' were illegal, hidden state subsidies.

The aid consisted of delayed payment of the sale price, under which British Aerospace benefited by an estimated $:33.4 million, and $:11 million that was provided to the two companies to offset the cost of buying a small number of Rover shares left in public hands. The commission ordered the British Government to recover $:42.9 million of the aid from British Aerospace and an additional $:1.5 million from Rover.

British Aerospace had no immediate comment, a spokesman said.

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