Company boss who raided pension scheme to prop up failing business avoids jail


Stuart Garner owned Norton Motorcycles and received investments from hundreds of people he split into three schemes

Stuart Garner, former owner of Norton Motorcycles, has avoided a prison sentence

A former business owner who used millions of pounds from the firm’s pension scheme to prop up the failing company has been spared jail.

Stuart Garner was the owner of Norton Motorcycles and established three funds worth around £11million from investors’ money, Derbyshire Live reported.

Derby Crown Court heard the shortfall caused irreparable harm to some investors.

William Hays, prosecuting, said the offenses were in relation to three defined contribution schemes known as Dominator 2012, Commando 2012 and Donington MC which had a total of 227 scheme members.

The investments, which were made in return for preference shares, were made between 2012 and 2013.

He said: “It is accepted he was receiving advice for a scheme to raise funds for the business, banks were not prepared to lend and that led to unlawful means of investment.

“The schemes in this case were used to inject capital into the Norton business at the time for investment and Norton was suffering production and liquidity problems.







Mr Garner “did not know” he was breaking the law, the court heard
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Image:

Will Johnson)

“Members asked to withdraw the money, as they are entitled to do but Mr Garner explained the business was suffering cash-flow problems. It is accepted Mr Garner did correct the illegality.

“It was reckless and negligent but it is not suggested Mr Garner knew of the offence.

“However he is an experienced businessman and this was a carefully constructed scheme.”

Peter Caldwell, mitigating, said his client’s actions had led to “a tragic fall from grace.”

He said: “He has experienced personal anguish and rather serious mental health crises both last year and at the beginning of this year.

“He was negligent in getting proper advice but there was no siphoning off of cash. He did not know he was breaking the law when, in fact, he was.







The former company boss avoided prison
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Image:

Derby Telegraph)

“It was not a cynical enterprise. The objective was not personal gain.”

Judge Nirmal Shant QC, Honorary Recorder of Derby, handed him an eight-month jail sentence, suspended for two years.

He added: “You did not know you were breaking the law, however it is plain, in setting up a pension fund worth £11m, that you should have known your basic responsibilities as a trustee.

“You were obliged to act in a prudent manner according to law. You are an experienced businessman and you must have known there was a conflict of interest.

“It is quite plain the reason was that the banks were not prepared to lend you the money. The fact that banks were not prepared to lend you the money should have set alarm bells ringing to an experienced businessman.

“By 2020 £1.5m was paid out to members (but) there’s a shortfall of £10m. This is not just financial harm, I have read statement after statement from ordinary people who invested.

“Many speak of broken relationships and ill health. The harm this caused cannot be understated.”

Judge Shant disqualified Garner from being a company director for three years. He has also been ordered to pay £20,716.69 in costs.

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www.mirror.co.uk

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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