THE court heard yesterday that chairman of the Appliance Traders (ATL) Limited Group, Gordon ‘Butch’ Stewart wanted a reversal of the alleged unauthorised distribution of some $1.73 billion in surplus from the ATL pension fund in order that the money could be be used to assist pensioners “ravaged” by inflation.

At the same time, evidence was given about four reported fraudulent letters, purporting to be from Gorstew Limited, approving the distributions, that were allegedly presented by one of the accused to Stewart.

But the court was told that although the letters were dated over a 10-year period between 1998 and 2008, they appeared to be written on “brand new paper”, on the same colour paper, the same font and signed with the same blue ink pen.

The disclosure was made by ATL Group Global Chief Financial Officer David Davies during his evidence-in-chief in the trial of three former ATL executives accused of conspiring to defraud the pension fund and Gorstew Limited, Stewart’s holding company.

According to Davies, accused Patrick Lynch, then chairman of the Board of Trustees of the pension fund, told Stewart during a meeting on December 15, 2010 that no permission was given for the distribution of the surplus.

“He [Stewart] further stated that if he had been asked to consent to these distributions he would not have consented because he would rather use those funds to increase the benefits of the existing pensioners who had retired and who had helped him build a successful group of companies and were suffering from the ravages of inflation and a devalued dollar,” Davies testified in the hearing before the Corporate Area Resident Magistrate’s Court, Half-Way-Tree.

Davies testified further that Stewart had called the meeting after he (Davies) informed him of the content of a summary report from a review of the pension scheme conducted by audit firm PricewaterhouseCoopers.

Regarding the four letters purported to be consent letters carrying the Gorstew letterhead, Davies testified that they were presented to Stewart by Catherine Barber, the then pension fund manager, during a follow-up meeting on December 16, 2010. Davies testified that the letters approving the distribution carried the signature of Gorstew Limited Managing Director Dr Jeffery Pyne.

But in a revelation that came after the luncheon break, Davies testified that three draft letters of those presented by Barber to Stewart on December 16, 2010, along with a note, were found in a file in Lynch’s office following his retirement in December of that year. He said the draft letters — dated June 10, 1998, June 7, 2002 and March 22, 2005 — were not signed.

Apart from the three draft letters and note, Davies said he saw an e-mail addressed to Lynch containing a “draft letter of consent”, dated July 17, 2008.

Following an objection from the defence, Magistrate Lorna Shelly-Williams ordered that the three draft letters and the e-mail containing the single draft letter be disclosed to the defence this morning.

Pyne, Lynch and Barber are alleged to have conspired to have more than the $1.73 billion 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. The prosecution is further alleging that the distribution was done without the approval of Gorstew Ltd. The three were arrested in April 2011.

According to the narrative given by Davies yesterday, Stewart was “very concerned” after he (Davies) informed him about the summary report presented by PricewaterhouseCoopers and called the meeting of December 15, 2010.

“Mr Stewart asked Mr Lynch if he had ever discussed the distribution surplus with him (Stewart),” Davies said. “Mr Lynch responded to Mr Stewart and said ‘no’ he (Lynch) had never discussed the distribution surplus with him.”

He said Stewart subsequently asked Lynch if he was aware that the Trust Deed governing the operations of the funds required consent from founder Gorstew.

“Mr Lynch replied ‘no’ he was not aware that the Trust Deed required the founder’s consent and if that was so it meant that the trustees had acted ultra vires,” Davies continued.

Davies said Stewart then informed Lynch that the distribution was unauthorised and should be reversed. Stewart, Davies said, instructed Lynch to meet with Barber to discuss having it done.

Davies said later that day — December 15 — he and Dmitri Singh, the ATL’s corporate lawyer, telephoned Lynch and Barber to ascertain their progress on Stewart’s instruction to have the distributions reversed. Davies said Lynch made a number of recommendations, including the winding up of the pension fund, which Davies scoffed at.

Davies testified that at the meeting of December 16 at Stewart’s Half-Way-Tree Road, St Andrew office — which included Lynch, attorney Trevor Patterson, Singh, and Davies — Barber was invited over by Stewart. Davies said Stewart asked Barber why she didn’t ask his consent for the distribution, to which she replied that she had received consent. She then left the meeting for her Beechwood Avenue office and returned with the letters in a file.

According to Davies, he was “shocked” by the presentation of the letters as at no time during his conversation with Lynch and Barber on the evening of the 15th did they speak about having the letters.

Asked about Stewart’s response to the letters, Davies said: “He asked Mr Lynch when had he first seen these letters and also why didn’t he mention them before Mr Lynch said he first saw these four letters the previous evening on December 15 when he had met with Catherine Barber…”

Davies said Stewart asked Lynch why then didn’t he bring the letters to his attention from the previous day. “Mr Lynch replied that if he had told Mr Stewart about those four letters it would only have aggravated him, as Dr Pyne had been asked to resign earlier that year in May 2010,” added Davies, who said that Pyne and Stewart previously had an “excellent” relationship.

The trial continues today.