Richard Martin Williams has been disqualified for 12 years from acting as a director for failing to make sure Carrington Wire Limited (CWL) met its obligations to the CWL Defined Benefit Pension Scheme and causing Gillico Limited, a dormant company, to facilitate a series of transactions which enabled an unconnected Russian company to avoid its liabilities to the CWL Defined Benefit Pension Scheme.
The Pension Fund contained over 500 members and endured a loss of over 26m as a result of Mr Williams actions.
This disqualification follows an investigation by the Insolvency Service.
Carrington Wire Limited traded from 1924 as a manufacturer of wire products in Yorkshire. In 2006, OAO Severstal, a Russian company, purchased the entire shareholding of CWL.
Under the terms of the share sale agreement, OAO Severstal guaranteed the Carrington Wire Defined Benefit Pension Scheme (the Scheme) for as long as it remained associated with CWL.
CWL was loss making under Severstals ownership and in late 2008 OAO Severstal sought an exit from CWL.
Initially, the Scheme and its trustees were kept apprised of OAO Severstals attempts to exit CWL. When OAO Severstal was unable to find a third party that would purchase CWL and provide a guarantee or similar which would offer the same protection to the Scheme, OAO Severstal continued to seek an exit from CWL and the guarantee, without the trustees knowledge.
On 16 June 2010, the entire share capital of CWL was purchased by GILLICO, a company of which Mr Williams was the sole shareholder and director. GILLICO was not associated with OAO Severstal or any of the other Severstal companies and the share sale terminated OAO Severstals guarantee. No similar guarantee was provided by GILLICO which had been a dormant company until that point with assets of only 100, (representing its share capital).
On the same date, and at a time when he knew that CWL would not be able to settle the multi-million pound Scheme deficiency, Mr Williams was appointed a director of CWL.
Under the terms of the share sale agreement between OAO Severstal and GILLICO, a working capital adjustment of 400,000 was to be provided by OAO Severstal to GILLICO as purchaser of CWL.
Post completion, on 21 June 2010 GILLICOs solicitors received the sum of 400,000 and on 22 June 2010 these monies, net of the legal costs of the share sale/purchase, were transferred to Mr Williams. These monies, totalling 382,136 were not paid into CWL and instead, according to Mr Williams, were used by him to repay personal debts and make payment to his wife, from whom he was then separated.
At liquidation CWL had estimated liabilities totalling 26,554,460 (being the Pension deficit) and total deficiency of 44,903,162 (including 17,499,202 due to shareholders).
The Secretary of State for Business, Innovation & Skills accepted an Undertaking from Richard Martin Williams on 2 November 2015 for 12 years from 23 November.
In summary, Mr Williams misused his position as a director to:
withhold information from relevant parties
provide untruthful assertions, promises and statements that assuaged and coerced others
knowingly ignore the Pension Regulators advice/instruction in relation to security of Pension funds on sale/transfer
corruptly accept or divert payment for his part in the scheme
Commenting on the disqualification, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:
Mr Williams was the facilitator for a foreign owned business to abandon British workers and pensioners. He consciously and deliberately ignored the interests and enquiries of others, withholding information and also doing the opposite of what was advised and required via the Pension regulator. He ultimately personally benefited through the payment of moneys by the Russian company to Gillico which he then diverted to his own pocket rather than ensuring it reached its supposed ultimate destination (Carrington Wire).
This was a disgraceful conspiracy to abandon a pension scheme and this disqualification shows that misuse of the privileges of limited liability trading are not tolerated and the Secretary of State will seek out miscreants to send a message to those tempted to use companies as a vehicle for evading debt, especially the pensions of hard working citizens.