Global CFO shocked, surprised at billion-dollar pay-out from ATL Pension Fund
DAVID Davies, the Appliance Traders Limited (ATL) global chief financial officer, testified yesterday to being “shocked and surprised” after reading an interim summary report regarding the alleged unauthorised billion-dollar pay-out in surplus from the ATL Pension Fund.
He made the disclosure during examination-in-chief in the Corporate Area Resident Magistrate’s Court trial of three former ATL executives charged with conspiracy to defraud the group’s pension fund and Gorstew Limited.
Patrick Lynch, the former chairman of the Appliance Traders Pension Fund; Catherine Barber, the former general manager; and Dr Jeffery Pyne, a former director of Gorstew Limited, are accused of conspiring to defraud the group’s funds and Gorstew Ltd, Gordon ‘Butch’ Stewart’s holding company.
The three are alleged to have conspired 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 in April 2011.
Yesterday, Davies, who was in his second day on the witness stand, testified before Resident Magistrate Lorna Shelly-Williams that he had read the interim summary report of December 2008 that was provided by audit firm PricewaterhouseCoopers, and spoke to the lead auditor. He said he was “affected” by what he read and what was reported to him.
Asked by prosecuting attorney Gayle Nelson what caught his attention, Davies said the section where an actuary report recommended the “distribution of $980 million, which represented the entire interest surplus of $629 million and 47 per cent, $351.6 million of the net withdrawal surplus”.
Nelson asked what he did about it.
“As I was overseeing the comprehensive review by the auditors [of the ATL Pension Scheme],” Davies said, “I reported the material to Mr Stewart verbally, which, in my humble view, is the genesis for this court case.”
He said with his training — as an auditor and his vast financial experience — the 47 per cent surplus distribution of 2007, as opposed to 15 per cent in 2004, represented a “significant and unusual jump”.
Additionally, Davies said he learnt from the Trust Deed and Rules governing the pension scheme and from the interim summary report from PricewaterhouseCoopers that the surplus could only be used with the consent of the founder, which is Gorstew Ltd.
Senior auditor Carolyn Bell-Wisdom, the prosecution’s first witness, had testified last week that her search had found no approval by Gorstew for the monies in question to be distributed.
Meanwhile, Bell-Wisdom concluded her time in the witness box yesterday.
Davies is expected to continue his testimony today.