Trustee pair pleads guilty to making illegal loans

Trustee pair pleads guilty to making illegal loans

Two pension trustees have pleaded guilty to making illegal loans amounting to £236,000 from a company pension scheme to its employer, according to the Pensions Regulator.

In a prosecution brought by the watchdog, Andrew Kyprianou from Middlesex and Colin Werb from Derby both admitted two counts of making prohibited, employer-related investments at Leeds Crown Court on August 17.

Employer-related loans are prohibited by law, regardless of the amount involved. This is a criminal offence and can potentially lead to an unlimited fine and/or imprisonment.

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Kyprianou and Werb had also been charged with providing false or misleading information to TPR contrary to section 80 of the Pensions Act 2004, the regulator added.

TPR alleged that the pair, employees of Eastman Staples — one of Huddersfield’s oldest and largest suppliers to the textile industry — fabricated minutes of trustee meetings to disguise the loans as investments.

The court heard how the pair used money from the Eastman Machine Company Limited Superannuation Scheme to make two loans, one for £96,000 in 2017 and a second for £140,000 in March 2018, to the scheme’s employer, Eastman Staples.

Both defendants were replaced by TPR as trustees of the pension scheme in December 2020 by Pi Consulting Trustee Services.

The pair, who initially pleaded not guilty to all charges, were released on bail to appear before Leeds Crown Court for sentencing on October 7, TPR added.

Maria Espadinha is editor of Pensions Expert, FTAdviser's sister publication