A tribunal has upheld a decision by The Pensions Regulator (TPR) to issue a contribution notice for Anant Shah, the former owner of the Meghraj Group Pension Scheme, to pay £1.8 million into the scheme.
The Meghraj Group Pension Scheme is the UK defined benefit scheme of the Meghraj Group, an international investment and banking advisory and fiduciary services organisation. It is currently in a Pension Protection Fund assessment period following Meghraj Financial Services’ entry into creditors’ voluntary liquidation in October 2014. The scheme’s debt is estimated at £5.85 million.
TPR investigated payments made from Meghraj Financial Services to its parent firm, Meghraj Property. These followed Meghraj Financial Services’ shares disposal in a joint venture business, paying out most of it as dividends. TPR argued that these payments should have been used to fund the scheme and that it was reasonable to issue a contribution notice against Shah and his nephew Rohin Shah.
In June 2020, a determination notice confirmed that £3.6 million should be issued against Shah and his nephew jointly and severally, who referred the decision to an upper tribunal that took place in May 2023. A tribunal for Rohin Shah has already taken place.
The tribunal judgment agreed that it was reasonable Shah pay a contribution notice, which included 50% of the sum that should have been paid into the scheme, as well as an uplift to take account of the passage of time since the event. The judgment also accepted that the amount of a contribution notice should be what is reasonable and not limited to the loss to a scheme resulting from acts or inactions.
Erica Carroll, director of enforcement at TPR, said: “We welcome this clear and helpful judgment, which supports our long-held views about how the legislation should be interpreted. It provides clarity on how contribution notice sums should be calculated by confirming they are not limited by the loss to the scheme. This ends the speculation caused by past cases over whether these sums should be purely compensatory. The amount of this contribution notice, together with the previous settlement, will provide a substantial sum to help meet the scheme’s deficit.”
The Meghraj Group was contacted for comment prior to publication.