No sign founder's consent required for ATL pension surplus payout - auditor

Published: Friday | May 3, 2013 Comments 0

The auditor who led a 2007 review of the ATL Pension Fund has testified that its memorandum and articles of association did not indicate that the board of trustees was required to have the founder's consent for the allocation of surplus.

This was one of a number of concessions made by Carolyn Bell-Wisdom, a chartered accountant and senior manager at the audit firm PwC, as the billion-dollar ATL Pension Fund fraud trial continued yesterday.

Patrick Lynch, the former chairman of the ATL Pension Fund; its former general manager, Catherine Barber; and Dr Jeffrey Pyne, the former managing director of Gorstew Limited, the holding company for hotelier Gordon 'Butch' Stewart, are on trial for allegedly distributing more than $1.6 billion from the surplus of the scheme without consent and using forged letters to justify the payouts.

However, in her cross-examination, attorney-at-law Deborah Martin, who is representing Barber, had a copy of the pension scheme's memorandum of association shown to Bell-Wisdom.

"Do you agree that nowhere in that document does it indicate that the trustees are required to have the consent of the founder in carrying out any of their duties, including the allocation of surplus?" Martin asked.

"I have completed a perusal of the document and there is no reference to the founder's consent. That would be correct," Bell-Wisdom replied after several minutes of going through the document.

Asked a similar question when she was shown a copy of the ATL Pension Fund's articles of association, the PwC auditor again spent several minutes perusing it before replying: "There is no reference to consent of the founder."

no mention of need

She also agreed with a suggestion by Martin that in none of the three interim reports she produced after her review did she mention the need "or desirability" for the consent of the founder to be evidenced in writing.

"That is correct," she said in response to the suggestion.

In another concession, Bell-Wisdom agreed with Martin that "nowhere in any document is it stipulated that the consent of the founder (of the pension scheme) must be evidenced in writing to be valid".

"That is correct," she again replied.

Bell-Wisdom also gave evidence outlining how the net interest surplus of pension funds are calculated and should be utilised.

"Generally speaking, as far as I am aware, and from a technical standpoint, it belongs to the scheme or fund," she testified.

Martin: "To withhold consent to give to members interests on their funds held for investment, wouldn't that be unreasonable?"

Bell-Wisdom: "In my personal opinion, yes."

The PwC auditor has completed her cross-examination, but prosecutors have indicated that they intend to re-examine her when the trial continues today.

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