On the go: The Pensions Regulator is considering taking regulatory action against Stuart Garner, former owner of Norton Motorcycles, its chief executive has revealed.
In a letter to Work and Pensions Committee chair Sir Stephen Timms, Charles Counsell explained that the conclusion of the criminal proceedings against Garner allow the regulator to “now consider going ahead with regulatory proceedings”.
In March, Garner was given a sentence of eight months suspended for two years for each of three counts of breaching employer-related investment rules.
Derby Crown Court heard how Garner steered funds into three defined contribution schemes: Dominator 2012, Commando 2012 and Donington MC.
The investments, made between 2012 and 2013, were made in return for preference shares issued by Norton Motorcycle Holdings — the company in which Garner was the majority shareholder and director.
Garner has been ordered by the Pensions Ombudsman to repay the amount lost on investment in preference shares, less money already recovered, plus interest.
Dalriada Trustees, who was appointed by the regulator, sought ways to recoup funds from Norton, but the business subsequently failed, leaving members unsure whether they would ever see any of the money owed to them.
Counsell, who was responding to a letter from Timms questioning the “frustratingly slow” process facing members of the three schemes, explained that the “conclusion of these criminal proceedings removes the risk that separate regulatory action by TPR could prejudice any ongoing criminal investigation or prosecution”.
He said that in these cases, the factor considered by TPR when examining the use of its powers “will include the severity of the breach or impact, the extent to which the result would meet the outcomes we are seeking to deliver through our corporate strategy, and the resources available to us”.
In his letter, Timms said the process to recover funds and learn from the case has been “frustratingly slow for members of the schemes”, adding that he is aware of “complaints about the communications” from Dalriada, “which has so far incurred costs of £496,800”.
Counsell explained that the regulator’s expectations is for “trustees to communicate with members who have suffered a loss and to keep them appropriately informed about any possible routes of recovery”.
“In addition, if trustees are aware of additional specific risks to members, we would expect them to alert members and consider reporting these risks to us,” he noted, while adding TPR has been in regular contact with Dalriada since the company was appointed as the independent trustee in the Norton case.
Counsell also revealed that no claim to the Fraud Compensation Fund, administered by the Pension Protection Fund, has been submitted yet by Dalriada.
“This is because the FCF is a fund of last resort, so any potential recoveries from the liquidation and bankruptcy need to be realised first,” he said.
