A former owner of Norton Motorcycles Holdings Ltd., Castle Donington, England, pleaded guilty on Monday to diverting funds from three defined contribution schemes to the company as it neared collapse.
Stuart James Garner, the sole director of the three funds at the time of the hijackings, pleaded guilty in a court in Derby, England, to three criminal charges of breaching employer-related investment rules that restrict investment in a sponsoring employer at 5% of the assets.
The three defined contribution funds had a total of 227 participants who, in exchange for a reported £11 million ($15 million) of plan assets, received preferred shares which lost value as that the company was struggling. In April 2020, the company was sold to TVS Motor Co. Details of the plan assets transaction were not available.
The scheme’s assets were invested in the business by Mr Garner between 2012 and 2013, the pension regulator said in an August 2021 statement announcing its decision to sue.
The maximum penalty for each violation of the rules is an unlimited fine and/or a prison term of up to two years, according to TPR. Mr. Garner is due to appear on February 28 in another court that has sentencing power.
“Trustees need to be clear when a pension plan can invest in its sponsoring employer,” Nicola Parish, executive director of front-line regulatory for TPR, said in a statement on Monday.