The man who saved Norton Motorcycles only to see it fall into administration amid accusations of dishonesty and bad practice has pleaded guilty to illegally putting millions of pounds of outside investor’s pension funds into the failing business.
Stuart Garner rescued the historic bike brand in 2008, opening a factory in Castle Donington on the Leicestershire/Derbyshire border and developing the 961cc Norton Commando and a new range of Norton motorcycles. As sales grew, it expanded its workforce to around 100 and launched plans for a national training academy.
But by 2019 the business was in dire straits, pulling funding campaigns and facing winding up petitions from the taxman over hundreds of thousands of pounds of unpaid taxes.
In early 2020 administrators were called in and by the following summer the Pensions Ombudsman had accused Garner – as trustee of pensions schemes connected to the business – of dishonesty, breaching investment laws and failing to ensure investors were putting their cash in the right sort of schemes.
The Norton brand is now under new ownership having been sold to India-based TVS Motor Company in April 2020, who have relocated production to Solihull in the West Midlands.
Appearing at Southern Derbyshire Magistrates' Court today (Monday, February 7), Garner admitted to illegally using an estimated £11 million from the firm's pension schemes to reinvest into the business.
As well as being the company's owner at the time Garner was also sole trustee of the pension schemes which other people invested into.
During the short hearing the 53-year-old, of Park Lane, Castle Donington, pleaded guilty to three charges of breaching employer-related investment (ERI) rules.
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The Pensions Regulator says the maximum penalty for a breach of ERI rules is an unlimited fine and/or a prison sentence of up to two years.
Handing him unconditional bail, District Judge Jonathan Taaffe said: "I acknowledge this is a complex matter and it was clearly a conflict of interest involving substantial amounts.
"This clearly crosses the custodial threshold and I am sending the case to Derby Crown Court."
The court told how the offences were in relation to three defined contribution schemes: Dominator 2012, Commando 2012 and Donington MC which had a total of 227 members.
The investments were made in return for preference shares between 2012 and 2013.
Nicola Parish, executive director of frontline regulation at The Pensions Regulator, said: “As a trustee, Stuart Garner failed to comply with restrictions on investments which are designed to protect the funds of pension schemes.
"Trustees have a vital role in protecting the benefits of members and we will take action where that responsibility is abused.
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“Trustees should be clear on when a pension scheme can invest in its sponsoring employer.”
Garner will be sentenced on February 28.
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