A director has been disqualified for 12 years for facilitating a £26.6m pension scheme fraud.
Following an investigation by the Insolvency Service, Richard Martin Williams has been banned from acting as a director for failing to make sure Carrington Wire met its obligations to its defined benefit scheme.
The scheme had over 500 members and experienced a loss of £26.6m as a result of Williams’ actions.
In 2006, Russian company OAO Severstal purchased the entire shareholding of Yorkshire-based wire manufacturer Carrington Wire Limited.
Under the terms of the deal, OAO Severstal guaranteed the Carrington Wire DB scheme for as long as it remained associated with CWL.
CWL was loss making under Severstal’s ownership and in late 2008 OAO Severstal sought an exit from the business.
When it was unable to find a buyer that would offer the same protection to the scheme, it continued to seek an exit without the trustees’ knowledge.
In June 2010 the entire 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 only £100.
OAO Severstal provided a ‘working capital adjustment’ of £400,000 to GILLICO as part of the acquisition.
But instead of paying the money into CWL, Williams used it to repay personal debts and make payments to his wife, from whom he was separated.
At liquidation CWL had estimated liabilities of £26.6m in pension deficit and a total deficiency of £44.9m.
Insolvency Service chief investigator Cheryl Lambert says: “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.”