Stewart couldn't stop ATL pension fund distribution - Trustee

Published: Tuesday | December 10, 2013 Comments 0

A trustee for the Appliance Trader Limited (ATL) group pension scheme has testified that ATL boss Gordon 'Butch' Stewart did not have the power to single-handedly prevent the 2007 distribution of its withdrawal surplus.

The testimony by Claudette McLeish, who is also the former financial controller for Stewart's holding company Gorstew Limited, came as the billion-dollar ATL pension fund fraud trial of three former executives resumed in the Corporate Area Resident Magistrate's Court yesterday.

McLeish was responding to questions from defence attorney K.D. Knight about an extract from the witness statement Stewart provided in which he claimed to have informed one of the accused, former chairman of the scheme, Patrick Lynch, "that my policy is not to distribute the surplus to the members' accounts".

"Could any one director of Gorstew have the power to prevent the distribution of the surplus to the members' accounts?" Knight questioned.

"No," McLeish replied.

"Well, Butch Stewart said that, so I want you to answer me this: Based on the trust deeds and rules [governing the pension scheme], did Mr Stewart, as a director, have the power to single-handedly prevent the surplus distribution?" Knight pressed.

"Not for the pension scheme," she replied.

$1.7-billion distribution

Lynch, along with Catherine Barber, the former general manager of the pension scheme, and Dr Jeffrey Pyne, the former managing director of Gorstew Limited, are on trial for distributing $1.7 billion of net interest and withdrawal surpluses to members of the scheme without Gorstew's consent and allegedly using forged letters to deceive Stewart into believing that consent had been obtained.

Knight also questioned McLeish about a July 3, 2008, trustee board meeting she attended where it was decided that bonuses totalling $980.5 million would have been issued to the accounts of active members of the scheme while retaining $400 million as unallocated withdrawal surplus.

"At that time, did you know that it [the distribution] was subject to consent?" Knight asked.

"Yes," McLeish responded.

"Did you at any time seek to have the record state that this decision is subject to the consent of Gorstew?" he continued.

"I read the minutes at the next meeting," McLeish replied.

"And at the subsequent meeting, did you have it corrected to say that it should be recorded that the decision made was subject to the consent of Gorstew?" Knight pressed.

"No, sir," the former Gorstew financial controller responded.

McLeish also testified that between 2006 and 2010, with Lynch as chairman and Barber as the general manager, the ATL group pension scheme performed admirably and grew remarkably.

Knight will continue his cross-examination when the trial resumes today.

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