Norton Motorcycles: Stuart Garner sentenced over missing pensions

Stuart Garner appeared to have successfully revived the Norton brand, but it went into administration

A former millionaire who illegally invested £11m of people's pensions into his motorcycle business has been given a suspended sentence.

Stuart Garner brought the iconic Norton motorcycle brand back to the UK after buying the rights in 2008.

His business was given millions of pounds by the government and endorsed by MPs.

But hundreds of people have lost money after investing in three pension schemes where Garner was trustee.

He breached pensions regulations by investing all of their money into his business, when he should not have used more than 5%.

Judge Nirmal Shant QC gave him a custodial sentence of eight months but suspended it for two years, meaning he will not go to prison unless he commits a further offence within that time.

She said real harm had been caused to the people who invested in the pension schemes.

"This is not just financial harm," she said.

"I have read statement after statement of the trauma you have done to the lives of ordinary people who thought they were investing in their future.

"Many of them spoke of broken relationships, profound ill health, and having to face the misery of having to work much longer than they planned because of the financial damage you have done."

Derby Crown Court heard many members of the pension schemes had tried to withdraw money, but were told they could not.

William Hays, prosecuting, said people were owed about £10m as of January 2020 when the company went into administration, and it was still not known how much money they would be able to get back.

Sally Holmes said Stuart Garner had taken money from vulnerable people like her father

The 227 members of the schemes included Robert Dewar, who transferred his £120,000 pension to one of the schemes in 2012, and died in October 2019 aged 64.

"I just don't know how [Garner] can live with himself," said Mr Dewar's daughter, Sally Holmes.

"Because it's not just us. How can he have done that to so many vulnerable people, who trusted him, had faith in him, believed in him?"

Mrs Holmes spent three years before her father's death unsuccessfully trying to release money from his pension.

Her father had multiple sclerosis and she said the money could have paid for his mortgage and household bills while his condition deteriorated.

Instead, his wife had to take over his work as a self-employed commercial property agent, while also trying to care for him.

"His condition was deteriorating to the point where in the end he was only able to move his arms, hands even," said Mrs Holmes.

"He needed help eating, drinking, washing, dressing, and she [Mrs Holmes' mother] was still having to work full-time, because you just can't not earn money, and there was no back-up.

"I even sent him [Stuart Garner] an email saying 'He has died now, it's too late for us, this is the condition that he died in. All we wanted was to be able to look after him.' He never responded."

George Osborne visited Norton Motorcycles to announce a £4m government investment

Norton Motorcycles has since been bought by Indian firm TVS Motor Company.

In June 2020, the Pension Ombudsman ordered Garner to pay back millions of pounds owed to pension holders who invested in his three schemes, saying he had "acted dishonestly and in breach of his duty".

However, he has never paid back the money and was declared bankrupt in May 2021.

This was after Leicester City Council pursued Norton Motorcycles for defaulting on a £750,000 economic development loan, which had been personally guaranteed by Garner.

Stuart Garner partnered with Breitling to develop a watch, which was launched at an event in June 2019

The 53-year-old had pleaded guilty to three charges of breaching pension scheme regulations when he previously appeared at Southern Derbyshire Magistrates' Court.

The case was then sent to Derby Crown Court for sentencing.

William Hays, representing the Pensions Regulator, which prosecuted Garner, said the loss of money has caused "considerable hardship for those who have been unable to withdraw it".

Some had been unable to pay mortgages and had been forced to continue working for longer than planned, he said.

Some had suffered psychological difficulties, marriage difficulties, stress, sleeping problems, a loss of trust and self-doubt, he added.

"One refers to himself as 'an utter mug'," said Mr Hays.

'Sincere remorse'

Garner's barrister Peter Caldwell said he had "fallen from grace" and suffered "serious mental health crises" as a result of what happened.

"He has been on medication," said Mr Caldwell.

"He is, in his own words, 'trying to deal with it'. There are acute episodes where he needs help."

He said Garner had not realised he was breaking the law, which was accepted by the prosecution.

"This was not a position where he knew of the restriction and nonetheless went and did what he did," said Mr Caldwell. "He didn't."

He said Garner had personally made £30,000 of payments to pension scheme members before he was made bankrupt.

"Your honour should understand he sincerely does convey his remorse to you and to others," said Mr Caldwell.

'Red faces'

Jordan Gibbons, news editor of Motorcycle News, said he believed there should be an inquiry into what happened.

"There will be some red faces in government," he said.

"Through various investment schemes, millions and millions were either granted or loaned to the Norton business. Stuart was the poster boy of Brexit. He was in adverts. Stephen Barclay [then Brexit Secretary] went and visited the factory.

"The schemes were set up 10 years ago now. It seems astonishing to me that people wouldn't have realised sooner on that a lot of the money that was in the business had come from pension schemes that the money never should have come from."

A glowing profile in The Times in March 2012 described Garner as "one of a kind, an engaging Midlands millionaire who has fallen hopelessly for a battered old bike business, and now finds himself at the forefront of George Osborne's 'march of the makers'."

George Osborne, who was then chancellor of the exchequer, visited Norton Motorcycles in July 2015 to announce £4m of government funding for the business.

Vince Cable, while business secretary, also visited Norton in 2011 to announce a £625,000 government-backed loan.

"This iconic company, whose brand once inspired a generation of motorcycle enthusiasts, is a prime example of British business innovation," he said at the time.

"I hope that many more companies are inspired by what Norton is going to achieve through this funding."

Garner told Derbyshire Life, a local magazine, about his "simple" approach to business.

"Making a motorcycle business earn money didn't seem to be a very complex problem and I think the simplicity of my approach made it successful," he said in an article published in January 2015.

"My design team know that making a great motorbike is complicated but when I had a meeting with those guys, my approach was 'just press the 'make' button, boys'.

"I gave them the problem of making the bikes and, by not getting bogged down by the detail, I was able to concentrate on the rest of the business - dealing with finances, brand value, market position, distribution and dealer network - in order to sell at a higher price than it cost to make, and make a profit.

"Business is simple, really: buy the product at £1, sell it for £2 and make sure you operate for less than £1."

Stuart Garner bought Donington Hall in Leicestershire, and the motorbikes were built in a former office building nearby

Mr Gibbons said the business appeared to be successful on the surface.

"They started to develop new models, released them, they went racing to the Isle of Man TT, they developed a racing team, they signed star riders, including John McGuinness, who's one of the most famous TT riders of all time," he said.

"I guess quite simply they were just spending too much money on developing new motorcycles, going racing, by the sounds of things buying fancy cars and stuff like that, and not just building and selling and delivering enough motorbikes. It's really as simple as that."