20th November 2015
A company director has been disqualified over his part in a £26.6 million pension scheme fraud.
After an investigation by the Insolvency Service, Richard Martin Williams has been banned from acting as a director for 12 years after he failed to ensure the company Carrington Wire paid into its defined benefit pension scheme, which has over 500 members.
As a result of his actions, the pension scheme lost £26.6 million.
The problems started in 2006 when a Russian company, OAO Severstal, purchased the Yorkshire-based wire manufacturer Carrington Wire Limited (CWL).
Under the deal, OAO guaranteed the Carrington DB scheme for as long as it remained associated with CWL. However, under OAO’s ownership CWL was loss making and OAO sought an exit.
When it could not find a buyer that would provide the same level of protection for the pension scheme it continued to seek an exit without the pension trustees’ knowledge.
A buyer was found and in June 2010, the share capital of CWL was purchased by GILLICO, of which Williams was the sole shareholder and director. GILLICO did not provide a guarantee for the pension scheme and had assets of just £100.
As part of the deal, OAO provided GILLICO with a £400,000 ‘working capital adjustment but instead of paying the money into CWL, Williams used it to repay personal debts and make payments to his estranged wife.
On liquidation, CWL was estimated to have liabilities of £26.6 million in pension deficit and a total deficiency of £44.9 million.
Insolvency Service chief investigator Cheryl Lambert said: ‘Williams was the facilitator for a foreign-owned business to abandon British workers and pensioners.
‘He consciously and deliberately ignored the interests and enquiries of others, withholding information and doing the opposite of what was advised and required by The Pensions Regulator. This was a disgraceful conspiracy to abandon a pension scheme.’