Belling collapsed in 1992 with debts of more than pounds 20m. It later emerged that directors had used the pension fund to try to avoid receivership.
They borrowed pounds 2.1m from the pension fund, a sum paid to a Staffordshire solicitor, Charles Deacon, as an advanced fee for a promised $50m (pounds 32m) loan. The cash never materialised and the loan was not repaid. In January Mr Deacon was jailed for nine years for fraud.
In another ill-conceived and highly unusual deal, the directors, who also acted as pension fund trustees, sold one of Belling's subsidiary companies to the fund shortly before the collapse. When the pension fund later came to sell the company, it made a loss of pounds 4m. The outcome is that hundreds of people who had not yet reached retirement age when Belling called in the receivers,stand to receive substantially reduced company pensions.
Some cash has since been recovered, but it is thought the trustees appointed to run the fund, the City-based Law Debenture Trust Corporation, are recommending that members accept the current offer from the joint liquidators, Deloitte & Touche and Buchler Phillips. The liquidators' expenses will exceed pounds 1m.
However, the fund members' action group insists the scandal is far from settled. They argue that Belling had agreed to raise the value of pensions on the eve of receivership. If this more generous valuation is used, a further pounds 3m remains unrecovered. It is believed Law Debenture prefers to use a lower figure.
Jim Wignall, an ex-employee who paid into the pension fund for 21 years, explained: "We feel we should have been given all the assets from the liquidation. With this payout there's still a substantial shortfall."
Campaigners continue to call for a Department of Trade and Industry investigation into whether Belling was trading while insolvent in the months leading up to its collapse. In a Commons debate last week, the MP for Burnley, Peter Pike, said: "Warning bells should have sounded and the DTI should have acted. Many professional organisations and advisers failed to give the necessary signals and act properly. It is a disgrace that ordinary honest people have lost out on their pension entitlement."Reuse content