Stuart Garner, the man who oversaw the rebirth and then collapse of the historic Norton Motorcycles brand, said he believed people who invested millions in pensions schemes connected to the business could yet receive “all their capital back”.
It comes after the former Norton owner and chief executive was accused of acting dishonestly in the way he dealt with investors who put pension pots worth more than £10 million into the bike business.
Norton went into administration earlier this year with millions of pounds of debts, and is now in the hands of new owners.
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Following an investigation on behalf of 31 investors, the Pensions Ombudsman said Mr Garner, as trustee of the schemes and as sole director of Norton Motorcycle Holdings at the time:
- acted dishonestly and in breach of his duty of no conflict and his duty not to profit from the schemes
- breached his statutory, investment and trust law duties
- failed to have adequate controls to manage conflicts of interest and ensure the effective administration of the schemes
- didn’t have the right knowledge and understanding of the law relating to pensions and trusts
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- was guilty of maladministration when it came to issues such as ensuring the schemes’ investments were appropriate for their members
- appointed someone in February 2019 who had been jailed for tax fraud to act as a contact for scheme members
Pensions Ombudsman Anthony Arter said: “I find that the trustee’s [Garner’s] maladministration has caused an exceptional level of distress and inconvenience to the applicants, preventing them from making important life decisions over a prolonged period, such as retiring from their occupations, and I shall direct that the trustee makes a payment to the applicants of an amount which recognises the level of distress and inconvenience which they have suffered.”
He added: “Mr Garner, no doubt in his executive capacity, will have knowledge and awareness of the news and reaction, in 1995, to Robert Maxwell misappropriating monies from his companies and their pension plans to finance his corporate expansion.
“This was well publicised to all persons, whether pension trustees or otherwise.
“In my judgment, it is this general blunting of his moral antennae which explains why the trustee had a lower standard of honesty, as well as his recklessness for others’ rights.”
He went on to say: “As a consequence of those breaches of trust, scheme members’ funds have been lost in their entirety.
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“The members have also missed out on the investment growth that they might have benefited from had they invested their funds elsewhere.”
Mr Garner had rescued the historic bike brand back in 2008 only to see it fall into administration in January this year after Metro Bank froze its accounts, because of £3 million of debts.
The bike business had been hit by a catalogue of problems, including concerns raised by the auditors in its last set of accounts and a High Court case over hundreds of thousands of pounds owed to HMRC.
There were also dozens of bike fans who said they had handed over thousands in upfront payments for bikes that were never delivered.
In April the business was sold out of administration to Indian motorbike giant TVS Motor Company for £16 million.
A BDO administrator’s report in March said it had received unsecured claims from creditors of almost £7.2 million prior to the sale, including £3.37 million from 466 people who had put deposits down on new Norton bikes.
It said the deposits had not been ring-fenced, so they would get nothing back.
BDO is working on the sale of Norton property, including the Donington Hall Estate, in north Leicestershire, where Norton is based, for between £4-£7 million.
Mr Garner said: “It’s not appropriate to comment on the ombudsman just now.
“I would say I’ve worked with BDO who are sitting on £16 million cash from [the] Norton asset sale with a further several million expected to come in from Norton property sales.
“The money is not “missing”. It is all in the business and its assets.
“No-one has agreed what the pension investor amount is yet. But with £16 million in cash and several million of property assets to come in, it looks likely they will receive all their capital back.”
Asked what he was now doing he said: “Currently working with DBO to ensure a strong property sale across Donington Hall and the Priest House [Hotel}.
“I’ve lost everything with Norton, so I’ve no idea what the future holds yet.”
BDO refused to comment but it is understood a creditors report will be out in late July or early August.