New enquiry into missing Norton pension millions to be launched

Fresh scrutiny is to be placed on how financial regulators handled and prosecuted a multimillion-pound pension fraud case whose members have yet to receive compensation.

Sir Stephen Timms, the Labour MP for East Ham and chair of the Work and Pensions Committee, is to launch an enquiry into how £11m of pension funds invested into the then Castle Donington-based Norton Motorcycles disappeared.

In March 2022, Stuart Garner, the former boss of Norton Motorcycles, was sentenced to eight months in prison – suspended for two years – after pleading guilty to illegal pension investments.

Garner received three 12-month sentences, which were reduced to eight months, to run concurrently. They were subsequently suspended for two years. He was also ordered to pay £20,716.69 in costs and has been disqualified from being a director for three years.

Garner admitted illegally investing £11m into the business from three pension schemes for which he was the sole trustee, but claims that he was duped by fraudsters.

Garner, of Park Lane, Castle Donington, pleaded guilty to three charges of breaching employer-related investment (ERI) rules by investing more than 5% of assets from each scheme into his business, Norton Motorcycle Holdings.

The offences were in relation to three defined contribution schemes: 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.

However, an investigation by the Guardian Today Focus podcast makes new allegations against Garner that raise questions over whether he was scammed or not.

These allegations include; accusing Garner of forging signatures of business partners at Norton so that he could raise funds; tapping into public money after making inaccurate claims to Government officials; and overseeing a business which pre-owned motorbikes returned to Norton were stripped of parts which were then used to make new bikes.

In February last year, after it was announced that the Norton pension schemes were under investigation, a man who has lost £65,000 as a result of the Norton Motorcycles scandal called upon the Government to bring the firm’s owner Stuart Garner to justice.

Speaking to TheBusinessDesk.com, Richard Jones said he should be enjoying £300 a month income from one of the pension schemes set up by Norton Motorcycles owner Garner and a lump sum of £18,000, but that he is now in danger of losing out after the manufacturer entered administration in January.

Jones told us: “I first became involved with the pension transfer when I saw an online advert stating that I could get a cash lump sum by transferring, no mention of Norton. I responded to the ad and spent an hour talking to the guy, a Mr Davies who turned out to be Simon Colfer.

“I was a fan of Norton as I have an interest in vintage bikes and scooters.”

Jones said his first contact was Simon Colfer, a fellow Welshman from Llanelli in October 2012. Jones told us he needed some cash for a new business venture and he received £12,000 for transferring his fund of £50,000.

He added: “My suspicions were first aroused when I received a visit from South Wales Police Financial fraud investigation unit. They told me about Mr Colfer who had recently been released from jail after he committed a fraud involving hundreds of thousands of pounds, possibly £1m.”

Jones said that he believes that while Colfer was in prison he met his accomplice who was from Bournemouth.

He added: “I think and the two hatched a plan to scam pensions, as Mr Colfer was made part of the proceeds of crime act for the unrecoverable monies from his previous fraud. South Wales police have to periodically conduct ad hoc visits on him to inspect bank accounts. “It was on such a visit in 2013 that they discovered he had £800,000 in his current account, they immediately arrested him and his girlfriend and confiscated passports pending an investigation to which I became a part, after six years he was charged and went Crown Court where he received a suspended sentence.”

Jones says he has lost the whole of his pension pot which was last valued in 2019 at £65,000. He believes the total transferred money that was lost is £14m.

He added: “It is becoming increasingly obvious that Mr Garner has used some of the Pension money to fund his lifestyle.”

Timms told The Guardian: “Our inquiry will look at the lessons that can be learned from this experience to ensure the right regulatory arrangements are in place both to protect pension rights better and ensure compensation is paid promptly when things go wrong.”

The Pensions Regulator said: “We successfully prosecuted Stuart Garner for three serious pension-related criminal offences. Garner received an eight-month suspended jail sentence, was banned from being a company director for three years and ordered to pay costs.”

Norton was eventually out of administration for £16m by Indian firm TVS Motors. It has since moved its headquarters to the East Midlands.