Public accounts committee chair Meg Hillier is calling for an official inquiry and accuses government officials of “blindly pouring” millions of pounds of taxpayers’ money into the failed company.
Government loans and funding include:
In 2012, the UK government backed a £625,000 loan by Santander;
In 2015, the UK government granted £4m in funding with £1.8m to Norton and £968,123 to the British Motorcycle Manufacturing Academy, a charitable business controlled by CEO Stuart Garner;
In 2016, a further £1.2m funding was given to Norton by Innovate UK, a public body funded by the UK government; and
In November 2019, Norton launched a crowd funding campaign which it dropped when the Midlands Engine Investment Fund, part of the British Business Bank, provided the company with a £1.5m “growth loan”.
However, the loan was never granted as in January 2020, global accounting firm BDO UK was appointed administrators.
The 122-year-old British company was on its knees when Garner bought it in 2008.
And that’s when Norton’s problems seem to have started.
In 2008, a £1m loan came from the proceeds of a tax fraud over which two longstanding Norton associates were convicted in 2013.
Other problems encountered by Norton include:
Customers who paid a deposit but never received a bike have taken legal action;
Claims that warranties have not been honoured;
A high turnover of staff;
Failure to pay parts suppliers resulting in a lack of spares and poor quality control;
A threat to strike the company off the Register of Companies over a late-filing notice; and
Isle of Man TT racing legend and 23-time race winner John McGuinness claims he could not contact Garner about his contract to race this year (He’s now gone to Kawasaki).
The biggest alleged fraud involves 228 pensioners investing £14m in five-year pension funds (Commando 2012 Pension Scheme, the Dominator 2012 Pension Scheme, and the Donington MC Pension Scheme) in 2012 and 2013.
The funds were invested primarily in Norton Motorcycles.
Trustee of all funds and sole director of their provider was Manocrest Ltd, owned by Garner.
The pensioners also claim they were promised a zero tax bill and lump-sum payment, but they were lumped a hefty tax bill and no lump sum after the lock-in period had expired.
Garner was expected to appear before the pensions ombudsman on 13 February 2020, but did not show.
“Two weeks later a phone call from Ray Wilson said if we paid the balance, about £17,000 we could have the bike in three to 10 days,” he says.
“We still haven’t received it despite ringing them twice a week and repeated assurances that it was on the build list.
“Late November we realised something was wrong so we contacted the police suspecting that they had obtained our money by deception the police referred it to the fraud department and as far as we know the file is still open.
“We have contacted the consumer protection agency who are guiding us through the claims procedures.
“We had also paid a £500 deposit against an Atlas Ranger.”
It seems Norton was viewed by the government as one of the last bastions of British manufacturing and engineering. Garner was even a poster boy for British exports.
Several government ministers readily endorsed the company and posed in media photo opportunities with Garner, including former PM Theresa May.
“Government has got to step up and be better in its due diligence of the companies that it gives money to,” Hillier told the Guardian.
“A little bit of digging would have uncovered some of the problems that were going on at Norton … (the government) seemed to go on blindly pouring money into an ‘iconic British business name’, seemingly not having picked up that there were problems with this business.
“It reads a bit here of Whitehall not doing its due diligence and, perhaps, not challenging ministers enough when they said this is a good company.”