Industry

This is the full story behind the messy demise of Norton Motorcycles

As the BDO report on the financial status of Norton comes to light, it makes some seriously uncomfortable reading

SINCE Norton slid into administration in January this year, the tale of what has actually happened to the iconic UK motorcycle maker has not been fully known.

While a tale of mismanagement and poor accounting seems to be a recurring theme that no doubt played a key role in sinking the firm, the true extent of the damage has, until now, not been fully known.

As BDO begins the task of piecing the business back together and making it a viable product that could be re-sold, they’ve released their Administrator’s Report on Companies House. In it, they detail all of Norton’s assets, debts, and accounts held with banks and creditors. You might want to sit down and grab a cuppa.

First off, the good news. The potential new owners of Norton are lining up for a shot at owning the firm and the bidding looks strong. In total there were 331 expressions of interest in the firm, a number that has been slimmed down 169 over time – they include trade companies (such as Indian firm TVS) and investors. The chances that Norton won’t live on after all this look slim, as the brand even now still evokes such a strong feeling in the industry.

The report also shows that Norton owes £6.3m to unsecured creditors, although it is also reported that BDO has received unsecured creditor claims of more than £7m. The reason for the discrepancy seems to be incomplete or inaccurate bookkeeping on Norton’s part. But that’s not the last time that the phrase ‘incomplete or inaccurate bookkeeping’ will be used in this story…

The biggest secured lender was Metro Bank, who are shown to be owed £4.4m by Norton and just over £3m by the firms Donnington Hall HQ, which was filed differently to the motorcycle business on Companies House.

BDO also report that Norton was holding over £3m in customer deposits from an estimated 466 potential customers. Sadly, for any punters out there that paid into this pot, because of Norton’s lackadaisical approach to accounting, the funds weren’t held in a separate account. Because they aren’t easily located in the mire of shoddy bookkeeping, plucking out these funds and returning them to customers is impossible. Instead, they join the long and unhappy queue of people owned cash.

When the administrators were called in at Norton, 69 bikes were found to be either in the firm’s possession at Donington of other sites across the globe. Of those 69, 15 were in for servicing, 14 in various stages of construction, 13 were owned by Norton, 9 were in for warranty work, 9 were sold to third parties, 5 display bikes overseas, 1 pre-production bike, 3 claimed to be owned by third parties and 1 of unknown location.

All the bikes in for servicing and warranty work have been returned to their rightful owners, although it looks as though the bike in construction hadn’t yet been assigned owners so it will likely be absorbed as a business asset.

Where has all the money given to Norton gone?

What the report doesn’t show is where all the money from the supposed deals Garner did with the UK government and overseas companies is or has gone. Norton received over £5m in taxpayer funding and another £4 from the BEIS for the motorcycle firm and its supply chain partners. There was the deal with Zongshen in August 2017, that alone was reported to be a multi-million-pound deal. Even days before the collapse of the brand, Garner was reported to have sold the 961 engine rights to Jinlang. Where has this money gone as the BDO report shows that Norton only had $211,000 dollars in one account and £15k in another…

Either Garner was that bad at holding onto cash that he lost it on the bus home or he really needs to check down the back of his sofa.

The rest of the report is a car crash read, documenting what looks like 12-years of poor management, bad business decisions and a CEO who had the mainstream press, the government and certain sides of the motorcycle press eating out of his hand.

What about the Norton pensions Scandal?

One thing the BDO report doesn’t touch on is the pension scandal that Garner and his dubiously chosen business partners used to shoehorn millions out of unwitting customers. Once paid into the scheme, the funds that were supposed to be going towards retirement savings were directly poured into the Norton brand.

Garner is already simmering in a pot of hot piss for this one, as the pensions regulator are looking to discuss with him where the £14m held by his ‘pensions scheme’, of which he was the trustee of has gone.

They’ve already had one hearing about this. Garner didn’t bother turning up. To be fair, he was probably polishing his Aston Martin.

You can read it all here: beta.companieshouse.gov.uk/company/06718623

Comments

I've got a classic norton dominator which I love, so I've got a bit of a soft spot for them. I hope they get back on their feet. Alex - https://southamptoncarpenter.co.uk/

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