Two pension trustees plead guilty to illegal loans

Two pension trustees have pleaded guilty to making illegal loans worth £236,000 from a company pension scheme to the scheme's employer, after initially pleading not guilty to all charges.

In a prosecution brought by The Pensions Regulator (TPR), Andrew Kyprianou, 60, and Colin Werb, 71, both admitted two counts of making prohibited employer-related investments at Leeds Crown Court yesterday (17 August).

Both trustees have also been charged with providing false and misleading information to the regulator, contrary to section 80 of the Pensions Act 2004.

In its prosecution, TPR alleged that the trustees fabricated minutes of a trustee meeting to disguise the loans as investments.

The court heard how between 2017 and 2018 Kyprianou and Werb unlawfully paid £236,000 from Eastman Machine Company Limited Superannuation Scheme to Eastman Staples Limited in the form of two loans, contrary to section 40(5) of the Pensions Act 1995.

The first loan of £96,000 was made in 2017 and the second loan of £140,000 was paid out in March 2018.

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

They have both been released on bail to appear at Leeds Crown Court for sentencing on 7 October.

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