The ex-owner of Norton Motorcycles has been handed an eight-month suspended prison sentence for illegally channelling nearly £11 million from pension funds to bolster his ailing enterprise.
According to a report from The Pensions Regulator (TPR), Stuart James Garner, 54, convinced 255 individuals to reroute their investments from existing pension plans into three schemes tied to Norton. These schemes were the Donington MC Pension Scheme, Dominator 2012 Pension Scheme, and the Commando 2012 Pension Scheme, all of which funnelled investments into Norton Motorcycle Holdings Ltd. In exchange for this, participants received preference shares in the motorcycle company.
Garner was not only the primary shareholder and director of Norton Motorcycles but also managed Manorcrest Limited, the primary employer of the scheme. This dual role flagged the company as being “connected and associated” with the employer, casting a shadow over the legitimacy of the pension schemes.
Members were led to believe that they were primarily investing in the Norton Motorcycles enterprise. The conditions of the scheme bound them from accessing their investments for two years post-transfer, with additional fees imposed if withdrawals occurred within a five-year window.
Garner’s actions, which involved siphoning off close to £11 million from the £11.5 million pool, contravened employer-related investment (ERI) guidelines.
In the aftermath, Dalriada has been entrusted with the role of independent trustee. Furthermore, the Fraud Compensation Fund, overseen by the Pension Protection Fund, is leaning towards the possibility of dishonesty in the case, a pivotal decision that could pave the way for compensation. This development has been communicated to the scheme’s members by Dalriada.
During the final verdict, Judge Nirmal Shant emphasized the gravity of Garner’s actions, stating that his recklessness had not only precipitated monetary loss but had also inflicted significant mental distress upon the victims.
Nicola Parish, TPR’s Executive Director of Frontline Regulation said: “Our intervention report details how we and other agencies acted against Stuart Garner, including a successful prosecution for offences relating to serious breaches of pension investment duties.
“By taking money from schemes in his care to invest in his failing business, contrary to his duties as a trustee, Garner showed a lack of integrity, competence and capability. It is right he has now been banned from ever acting as a trustee again.
“Our focus remains on supporting the independent trustee in pursuing compensation for scheme members through the Fraud Compensation Fund.”
Garner was also disqualified from acting as a company director for three years, which also prevented him acting as a trustee during the period of disqualification and ordered to pay TPR’s costs of £20,716.