Tag Archives: fraud

Norton Motorcycles boss under investigation

Failed Norton Motorcycle boss Stuart Garner is in more strife with the UK Pensions regulator now investigating his role in a pension scheme to fraudulently fund his company.

In January, Norton Motorcycles went into administration amid claims of pension fund frauds and a £300,000 unpair tax bill.

In 2012 and 2013, 228 pensioners invested in five-year pension funds (Commando 2012 Pension Scheme, the Dominator 2012 Pension Scheme, and the Donington MC Pension Scheme) which invested primarily in Norton Motorcycles.

Trustee of all funds and sole director of their provider, Manocrest Ltd, was Stuart Garner.

The pensioners claim their investment was not returned years after the lock-in period had expired and £14 million in investments were lost in the company collapse.

In February, Garner failed to appear at a public hearing held by the Pensions Ombudsman to investigate complaints about the pension schemes. 

Norton boss Stuart Garner at Donington CastleGarner in his home at Donington Castle

Under investigation

It’s taken until now for the Pensions Regulator to launch an investigation.

Last year the Pensions Ombudsman criticised Garner for a “clear” conflict of interest as trustee of schemes that invested all funds into his business.

“It appears to me that the investment of all of the scheme’s assets in Norton Motorcycle Holdings is potentially in breach of the restrictions on employer-related investments under section 40 of the Pensions Act 1995,” the ombudsman said.

Garner faces a fine and/or jail if found guilty of a conflict of interest.

Despite being chased by investors, customers, the government and now the Pensions Regulator, Garner and his wife, Susie, were last month spotted dining out at elite London restaurant, The Ivy, where a steak costs about £30 (about $A60).

Norton Stuart and Susie GarnerStuart and Susie Garner dining out

The photo was published on the Twitter account Notnorton Moto as another example of Garner’s extravagant lifestyle.

At least in Australia, importers Brisbane Motorcycles have returned deposits to those who paid for bikes not yet delivered.

The UK government is now being called on to investigate almost £8m in funding and loans amid claims that Garner squandered the money on fast cars and a lavish lifestyle.

Click here to read the whole sordid tale.

Buyers sought

Norton Motorcycles Donington Hall factory crowdNorton’s Donington Hall factory

The company ceased production in February, but administrators BDO UK say they have “significant interest” from potential buyers.

BDO spokesman Lee Causer says they are “taking all necessary steps to ensure that customers, staff and suppliers are supported through the administration process, as we seek the sale of the business and assets”.

“We have had a significant volume of interest and are hopeful that a sale of Norton Motorcycles (UK) Ltd can be secured,” he says.

That’s good news for Norton fans and customers.

Norton boss Stuart Garner at Donington CastleGarner relaxes at home

The rumour mill has been running hot with talk of Japanese and Chinese motorcycle companies and even motorcycle fan Keanu Reeves being interested in buying the venerable brand.

Norton KeanuKeanu on a Norton Commnando

A petition to Triumph Motorcycles boss John Bloor to buy the company has only received 61 signatures.

Meanwhile, another petition to the government to launch an official inquiry into Garner has more than 7000 signatures.

SuperBike Magazine claims the company’s biggest single investor, Steve Murray, could be interested in buying the company.

They say he invested his entire life savings or about £1 million for 10% equity and loaned the company an extra £500,000.

He was a company director for three months, but chose to be “hands-off”.

The deadline for bidders closed on 21 February 2020. There has been no update from the administrators.

Source: MotorbikeWriter.com

Warning on potential RiderBuds fraud

Riders are warned not to support the crowd-funding campaign for RiderBuds earphones nor to buy them because of a suspected fraud.

The campaign launched in November 2018 but the earphones have still not been delivered to many customers.

We published an article that month ($US199, $A275, €175, £150) that said they were claimed to be the smallest, softest, toughest, quietest and most secure earphones for riders.

Like other previews of prospective motorcycle products, we included a warning to our readers that supporting a crowd-funding campaign for a product not yet manufactured is not without risk.

Kickstarter and Indiegogo do not offer refunds to supporters who pledge money for products that either fail to reach their goal or do reach their goal and then fail through fraud.

The latter was the case with the infamous Skully head-up display helmet where the founders blew $US2.4m in supporters’ money on fast cars and women!

Unless a crowd-funding campaign specifically mentions a refund, supporters are advised they will have to contact the campaigner to get their money back.

RiderBuds ‘fraud’ warning

Riderbuds earphones

In the case of RiderBuds, many customers have complained on the campaign page that the product has still not delivered despite the delivery deadline of May 2019.

They also claim Indiegogo and the founder are not responding to emails.

We contacted Indiegogo and RiderBuds founder Maurice Dziubinski for comment and but have also received no reply.

Maurice told us on the launch of the campaign he spent hundreds of hours testing the earphones, talked with more than 1000 riders around the world and had a few dozen Beta testers, including in Australia and New Zealand.

His crowd-funding campaign was fully subscribed in three hours, 200% in 12 hours and raised $A164,255 from 688 backers within a month.

The campaign page is still live and has now amassed $A213,415 from 885 backers.

Indiegogo has a duty to remove or at least suspend the page and stop taking money when they have been alerted to potential fraud by several backers until it can be resolved.

The comments on the crowd-funding page seem to suggest Maurice of Poland is now living in Vietnam.

A reader who tested the prototype said it’s “a great product so I really hope they come through”.

“There have been delays for sure which has been frustrating but I don’t think he has any intention of ripping people off,” the tester said.

“He said he moved to Vietnam because of the COVID-19 outbreak; he was living in Hong Kong while he was getting the production etc sorted out.

“I’m not vouching for him in any way, just giving you some more info. I haven’t had any direct communication from months, but I didn’t expect any either. I think he underestimated the challenges of bringing a product to market!”

Source: MotorbikeWriter.com

Norton now faces fraud allegations

Not only has Norton Motorcycles gone into administration over £300,000 in unpaid taxes, but now charges of fraud have been levelled at boss Stuart Garner who blames Brexit for his company’s downfall.

It seems 228 pensioners invested in three different conventional five-year pension plans that fraudulently turned out to be Norton shares, according to an investigation by the UK Guardian newspaper and ITV News.

The pensioners also claim their investment was not returned years after the lock-in period had expired.

Allegations

Problems go back to 2008 when a £1m loan came from the proceeds of a tax fraud. Two longstanding Norton associates were convicted over the fraud in 2013.

It is one of many problems encountered by Norton:

  • Customers who paid a deposit but never received a bike have taken legal action;
  • Claims that warranties have not been honoured;
  • A high turnover of staff;
  • Failure to pay parts suppliers resulting in a lack of spares and poor quality control;
  • A threat to strike the company off the Register of Companies over a late-filing notice; and
  • TT racing legend John McGuinness claims he could not contact Garner about his contract to race this year.

Investments and grants

Norton Motorcycles Donington Hall factory crowdDonington Hall factory

Despite this long list of problems and fraud allegations, the UK government backed a £625,000 loan by Santander in 2012 and promised the company a £4m grant in 2015.

It wasn;’t the only financial boost for the company.

Last year Norton also signed a £20m deal with Japan to deliver an extra 1000 motorcycles worth £5m to Japanese riders over the next five years.

And in November, when the company launched a crowd-funding campaign to meet a £30 million order book for V4 and Atlas models an anonymous investor allegedly coughed up £1m ($1.89m), pausing the campaign.

So where has all the money gone from the Santander loan, government grant, Japanese investment and the “anonymous investor’s £1m” (if the latter ever did exist)?

Administration

Clearly Norton didn’t have the money to pay their taxes, so Metro Bank appointed global accounting firm BDO UK as administrators on 29 January 2020.

In the UK, administration protects a company from creditors and winding-up proceedings while a solution can be reached.

BDO now has eight weeks to send out formal administrative proposals to all of the insolvent company’s creditors and repay “without preference”.

However, we expect creditors will line up behind HM Revenue & Customs who are owed £300,000.

Garner blames Brexit

Prince William Isle of Man TTPrince William with Stuart Garner

Garner says he is “devastated” and “personally have lost everything”.

“However, my thoughts are with the Norton team and everyone involved, from customers, suppliers and shareholders at this truly difficult time,” he says.

“Without dialogue, Metro Bank appointed BDO administrators yesterday. We are now working positively and proactively with BDO to ensure Norton has the best possible chance to find a buyer.

“It has become increasingly difficult to manufacture in the UK, with a growing tax burden and ongoing uncertainties over Brexit affecting many things like, tariffs, exports and availability of funding.”

Australian customers

Norton Commando 961 Sport Mk II James Mutton crowdJames Mutton

In 2018, Brisbane Motorcycles took over importing Norton from NF Importers who also distribute Ducati.

Brisbane Motorcycles managing director James Muttons assures Australian and New Zealand customers who placed deposits for new models with their local dealer would receive a full refund.

“However we are not sure what is in line for those that placed orders prior to our distribution with the factory directly,” he says.

“We will obviously do our best to put those customers in touch with the correct people in the UK.

“In regards to existing Norton owners, we still have good stock of servicing parts, and will still be operating to ensure our customers are looked after.

“Ultimately we hope a larger brand with more experience will come in and continue the brand however this is purely speculation and we have had no official correspondence.”

Former Norton retailer Matt Jones of now-defunct Rocker Classic Motorcycles says he believes many other small businesses will also “go the way Rocker did”.

“Norton was a poisoned chalice and a lesson in business that I am still paying for today, both financially and mentally. Just horrendous,” he says.

Source: MotorbikeWriter.com