Two men who allowed pension funds worth millions of pounds to be put into “exotic, high risk and suspected scam investments” have been banned from acting as pension trustees.
The Pensions Regulator (TPR) has banned Stephen Alexander Ward and Anthony Salih after they put the funds under their trust into eucalyptus farms, hotel rooms on an African island and car park bays.
TPR executive director of frontline regulation, Nicola Parish commented: “Stephen Ward and Anthony Salih put millions of pounds of other people’s money at risk and have neither the knowledge nor the skills needed to run a pension scheme.
“Trustees play a vital role as the first line of defence for pension schemes but these two men allowed huge sums to be invested into high risk, exotic investments that bear all the hallmarks of being scams.”
Both men were directors of Dorrixo Alliance (UK) Limited, which acted as trustee for the London Quantum pension scheme, and TPR’s Determinations Panel found that they “lacked the competence and capability to be trustees”.
Between April 2014 and June 2015, hundreds of people were approached by introducers being paid commission to try to persuade pension holders to transfer their funds to the London Quantum scheme for investment in exotic sounding propositions.
Many of the over 90 members who transferred their pension funds, worth more than £6m, believed their funds were being put into low or medium risk investments, when in reality they were transferred into the high-cost, high-risk investments that paid large commissions to introducers.
The panel found that Ward’s behaviour was “reckless and demonstrated a lack of integrity”, as he had neglected to investigate an inappropriate investment that “should have been obvious to him as a professional trustee”.
Ward did not appeal against the decision. However, Salih did initially appeal against the finding that he lacked the competence and capability of being a trustee, although he abandoned this seven months later, ahead of the hearing.
Parish added: “As this case shows, we will take action to replace trustees if we believe they are putting scheme funds at risk and will ban those who are not fit to perform such an important task – pursuing cases right the way through the courts if that is what it takes to get the right result.”
Following concerns over the security and quality of the investments and over the administration and governance of the London Quantum scheme led TPR to appoint Dalriada Trustees Limited as an independent trustee in Dorrixo’s place.