AN auditor yesterday testified that there was no “evidence of approval” for the payout of more than a billion dollars of pension surplus, as the trial of three former Appliance Traders Limited (ATL) executives accused of conspiracy to defraud the group’s pension funds and Gorstew Ltd entered a second day.

Auditor Carolyn Bell-Wisdom, a senior manager at the accounting firm PricewaterhouseCoopers, testified during her examination-in-chief that the Trustee Deed/Rules that govern the ATL Group Pension Fund Trustees Nominee Ltd stipulates that consent should be given by the founder (Gorstew Limited) for the distribution of surplus from the scheme.

“We attempted to obtain evidence of approval by Gorstew of the 2007 bonus distribution; there was none readily documented or referred to on the files obtained or in the board meeting minutes,” said Bell-Wisdom.

Bell-Wisdom said she had discussions with then general manager of the pension fund, Catherine Barber (one of the three accused in the matter), in or around December 2010 or January 2011, about this and was told by her that a Board of Trustee’s approval on file was evidence of “sign-off” for the monies to be distributed.

“Based on examination of other clauses in the Trust Deed and Rules, this didn’t appear to be correct,” added Bell-Wisdom who, quoting from a report of a review of the pension scheme by her firm in 2010, said that the implication was that the “distribution of the funds may not have been properly authorised”.

Bell-Wisdom said that Barber told her that the Board of Trustee’s “signing off” on the matter was also evidence of Gorstew’s approval. The auditor, under questioning by prosecuting attorney Gayle Nelson, said, however, that she examined other clauses in the Trustee Deed and Rules to determine whether the Board of Trustees could represent Gorstew, but found nothing to substantiate that claim.

Along with Barber, the others on trial in the Corporate Area Resident Magistrate’s Court are Patrick Lynch, former Chairman of the ATL Pension Fund and Dr Jeffrey Pyne, the former managing director of Gorstew Ltd, the holding company for Chairman Gordon ‘Butch’ Stewart’s companies.

The three are accused of conspiring to have more than a billion dollars distributed from the surplus in the pension fund to workers and, in so doing, they allegedly benefited from the distribution, using forged documents to defraud the pension fund.

It is further alleged that the distribution was done without the approval of Gorstew Ltd. The three were arrested after the alleged fraud was discovered in December 2010.

Yesterday, under cross-examination by Queen’s Counsel Frank Phipps (representing Lynch), Bell-Wisdom conceded that her review found deficiencies with the operation of the pension scheme, among them the fact that there were no documented guideline of how the founder’s (Gorstew’s) consent should be obtained.

It was recommended in Bell-Wisdom’s report that the Trustee Deed and Rules and other governance documents should be examined for improvement.

She had said moments earlier, quoting from the report, that there may be ambiguity in the absence of guidelines.

With a line of questions, Phipps attempted to ascertain from Bell-Wisdom whether she was aware that two directors from Gorstew were nominated to sit on the Board of Trustees.

Phipps had intended to show that their presence on the board when decisions are being taken could constitute “Gorstew’s approval”.

But Bell-Wisdom said she didn’t know for a fact that persons from Gorstew Ltd were on the board. She said she was told by Barber that there “were persons nominated by or representing Gorstew” on the Board of Trustee of the ATL Pension Scheme.

Asked by Phipps if Gorstew Chairman Gordon ‘Butch’ Stewart had benefited from the questionable payout of surplus, Bell-Wisdom said ‘yes’. Asked if Stewart offered to give back the money because there was no approval for its disbursement, Bell-Wisdom said: “To my recollection, I saw no objection recorded.”

KD Knight, QC, who, along with John Junor QC, is representing Pyne, yesterday began cross-examination of Bell-Wisdom and will continue today.