‘Incompetent’ duo banned from acting as pension scheme trustees

More than £6m invested in high-risk ventures bearing ‘all the hallmarks of being scams’

The Pensions Regulator (TPR) has banned two men, who allegedly put pension savers’ money into high-risk and suspected scam investments, from acting as pension scheme trustees.

The UK watchdog took action after Stephen Ward and Anthony Salih allowed millions of pounds of transferred funds in their trust to be invested in eucalyptus farms, hotel rooms on an African island and car park bays.

The duo were directors of Dorrixo Alliance, which acted as trustee for the London Quantum pension scheme.

Lacked competence

TPR’s determinations panel found that both men “lacked the competence and capability to be trustees” and described Ward as “reckless and lacking in integrity”.

Both men were warned that they could be jailed if they act as a pension scheme trustee in the future.

Ward did not appeal his ban, while Salih launched an appeal in February to the Upper Tribunal. However, he abandoned the claim seven months later, ahead of a hearing.

TPR had made it clear throughout the process that it would strongly defend its case against Salih.

Exotic investments

According to TPR, 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”.

More than 90 people transferred their pensions, worth in excess of £6m ($7.7m, €6.75m), to the scheme. Hundreds of thousands of pounds were then paid out to Dorrixo, introducers and a business providing administration and marketing services.

While many of the members believed their funds were being put into low- or medium-risk investments, in truth, said TPR, the funds were going into high-risk illiquid investments that paid large commissions to introducers.

Concerns over the quality of the investments and governance of the scheme led TPR to appoint Dalriada Trustees as an independent trustee to the exclusion of Dorrixo.

Vital role

Nicola Parish, TPR’s executive director of frontline regulation, said: “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.

“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.”

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