Regulator wins backing for claim against ‘liberation’ scheme
Regulator welcomes judgement and says claims are ongoing against former trustees of scheme.
An independent trustee appointed by The Pension Regulator has won High Court approval to pursue a case against the former trustees of a pension scheme over allegations that it breached members’ trust in relation to a controversial pension ‘liberation’ offer.
The Pensions Regulator appointed Dalriada as trustee of the Pennines and Mendip pension schemes, after the former paid out £12m and the latter paid out £6m to investment company Hedge Capital for the purpose of making loans to scheme members.
The establishment of the Pennines and Mendip schemes was part of a plan for ‘ pensions liberation’ devised and implemented by JohnWoodward and John Davies through Hedge Capital Investments, Hedge Capital Investment Group and Hedge Capital, according to documentation filed with the court.
Between October 2011 and March 2012 476 individuals transferred approximately £19m from other occupational pension schemes to the trustees of the Pennines and Mendip pension schemes.
This sum, less expenses and a small retention in cash, was applied by them in subscribing for 18,086,000 preference shares in HCIG.
Approximately £6.5m was applied by HCL in making loans to members of one or other scheme, while £2.75m was invested by HCIL and is now represented by plots of agricultural land in Brazil and Florida, as well as shares in private businesses.
The balance has been used to pay commission or expenses or is now standing to the credit of the bank accounts of HCIG, HCIL or HCL, according to Dalraida’s claim.
Dalraida alleged in the claim that the transfers were made in breach of trust as part of the wider plan for pension liberation.
The High Court decision said: “For all these reasons I conclude that all the claims made in this action by Dalriada against HCIG, HCIL and HCL are arguable with real prospects of success. Accordingly, I dismiss the application for their summary dismissal.”
A spokesperson for The Pensions Regulator told FTAdviser: “We welcome the court’s decision to dismiss the summary judgement application. The appointed independent trustee, Dalriada Trustees Ltd, has written to members informing them of the outcome. Proceedings are ongoing.”