How Norton Motorcycles Collapsed with A Former CEO Now Facing Jail Time

Founded in 1898 by James Lansdowne Norton, affectionately known as ‘Pa’, Norton started as a manufacturer of fittings and parts for the two-wheel trade. That simple business however would go on to become one of the largest motorcycle manufacturers in Great Britain producing bikes up until 1977 when the last Norton Commando was produced.

After laying dormant for several decades in late 2008, Stuart Garner, a UK businessman, bought the rights to Norton from some US concerns and relaunched Norton where it was to develop the 961cc Norton Commando and a new range of Norton motorcycles such as the Dominator, Cafe Racer, and V4RR.

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Despite receiving millions of pounds from the British government in a bid to support the British motorcycle industry, the company was failing. From questions over pensions and winding-up orders to bikes that were never delivered, there had been rumors of problems at Norton Motorcycles for months.

Stuart Garner now faces jail for illegally investing other people’s retirement funds into the business.

Stuart Garner Norton motorcycles

Garner has been in the limelight for the pension problems ever since Norton went into administration in January 2020. He poured money from three pension funds—the Dominator 2012, Commando 2012, and Donington MC schemes—into Norton to help prop the business up, however by doing so, he breached laws that allow a maximum of 5 percent of occupational pensions to be invested into the employer’s company. Garner was the sole trustee of the funds.

In June 2020 a court ordered Garner to repay the money, estimated as being worth 11 million pounds ($15 million) to 14 million pounds ($19 million). However it doesn’t appear that investors in the funds have seen any of their money back yet.

By that stage, many of Norton’s assets had been sold to Indian bike company for around 16 million pounds ($21.8 million), although Indian opted not to take on the firm as a going concern. Instead, the current, Norton brand is a new company that has rights to the brand name and the intellectual property behind the bikes, but it’s not legally liable for the Garner-era iteration of the company when it comes to debts.

Garner, 53, led a jet-setting lifestyle as Norton’s owner, with a collection of Aston Martins and other luxury cars, and used the historic Donington Hall—an 18th century manor house neighboring the famous Donington racetrack—as the firm’s base. He also attracted significant government grants, worth several million pounds, to the business. However, he now faces a jail term of up to two years for the pension crime.

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Monday, February 7, he pleaded guilty at Derby Magistrates’ Court to three charges of breaching employer-related investment rules, investing money from the three pension schemes into Norton Motorcycle in return for preference shares. Nicola Parish, executive director of frontline regulation at The Pensions Regulator, said, “As a trustee, Stuart Garner failed to comply with restrictions on investments which are designed to protect the funds of pension schemes. Trustees have a vital role in protecting the benefits of members and we will take action where that responsibility is abused. Trustees should be clear on when a pension scheme can invest in its sponsoring employer.”

The maximum penalty for the offence is an unlimited fine and/or a jail sentence of up to two years. Although Garner pleaded guilty at Derby Magistrates’ Court, he has been referred to Derby Crown Court for sentencing because Crown Courts have greater sentencing powers than Magistrates’ Courts, which can’t impose jail terms of more than six months. He’s been given unconditional bail in the meantime, but District Judge Jonathan Taaffe said: “This clearly crosses the custodial threshold and I am sending the case to Derby Crown Court.”

He’s due to appear in court for sentencing on February 28, 2022

16th Feb 2022 vipcycle.com