On his way into the Royal Courts of Justice last week, Tony Flanagan, the Irish pension fund manager, had to pass a small scrum of angry pensioners carrying placards bearing pictures of his face.
Flanagan was on his way to court 14 of the Rolls Building, where he was to give evidence in just one of several strands of litigation in the UK, US and Isle of Man related to the collapse of Wilton Group, his pensions administration company, and its subsidiary Hartley Pensions.
On his way into the Rolls Building, he passed signs saying “Hartley Pensions £1bn missing” and “Our pensions are not dog shit”. A man in a white boiler suit decorated with black arrows protested that he was one of thousands of British pensioners who had been “in prison” since the fund managed by Flanagan collapsed in July 2022.
Hartley Pensions, a subsidiary of Wilton Group, collapsed after the Financial Conduct Authority flagged what it described as “serious operational, financial and regulatory issues”.
It triggered a full-scale regulatory intervention that left more than 17,000 British pensioners in limbo, with £2 billion worth of pension assets frozen.
In recent months those pension funds have begun to be transferred out to new administrators. But in parallel there has been a flurry of criminal and regulatory investigations into the Wilton collapse, as well as a welter of civil proceedings as liquidators and administrators of various subsidiaries of Flanagan’s empire have scrambled to identify what money is left and to whom it belongs.
Pensioners who had lost funds invested with Hartley Pensions protested outside the Royal Courts of Justice in London
GREGO BAGEL/GETTY IMAGES
It is a big fall from grace for Wilton Group, which grew rapidly between 2015 and 2020 amid a flurry of acquisitions. By 2021 the number of schemes administered by Wilton companies had grown from about 1,500 to more than 20,000 and the amount of funds under management rose to £2.2 billion. It was also a jersey sponsor of Bristol Bears, the English Premiership Rugby team.
The collapse has been messy and hotly contested, and Flanagan has been subjected to a number of serious allegations, including that he allegedly misappropriated money from Hartley; that he covered up that misappropriation by “stealing” money from a trust controlled by a “politically exposed person”; that he backdated documents to cover his tracks; and that he used pensioners’ money as his “piggy bank”.
Flanagan, from Co Tipperary, vigorously denies all these allegations, both in legal filings and in evidence in court. He argues that he was working hard to return money to its rightful owners and that he had an unblemished regulatory record since he began working in the financial industry in his early twenties.
In last week’s hearings the barrister Andrew Shaw, on behalf of the liquidator of Wilton Group, argued that Flanagan’s claim that he had an unblemished regulatory record was not wholly accurate.
Flanagan disagreed. He argued that while there were “regulatory issues, in the sense that the Hartley situation has caused regulatory issues … there has been no findings [against him] whatsoever”. He insisted that his “record is absolutely intact”.
Under questioning from Shaw, he acknowledged that there were “ongoing inquiries by the Isle of Man police, Isle of Man Financial Services Authority and the UK Financial Conduct Authority”.
Flanagan also admitted that he had been interviewed under caution by the police in the Isle of Man, though he did not give any further evidence about that investigation or where it currently stood, insisting only that there had been no charges or allegations against him.
In response, Flanagan said: “I wholly admit there are multiple inquiries and I am fully co-operating with every one of them.”
Shaw also raised the judgment of Judge Andrew Saffman in the High Court in Leeds, which had examined the transfer of control of a subsidiary called Guinness Mahon, a well-known merchant bank brand that Flanagan had acquired in 2018. Saffman had later ordered the transfer to be reversed.
The judge also concluded that Flanagan had not been a “wholly reliable witness”. Flanagan disagreed with the judge’s conclusion that he had made the transfer for Guinness Mahon improperly. He said he had done it “for good and honourable reasons” — that is, to return money to investors.
Shaw also brought up a number of transfers of cash from Guinness Mahon into an Egyptian company controlled by Flanagan.
According to documents filed as part of the Leeds case, the liquidator of Wilton identified “14 payments [were] made between November 10, 2023. and June 26, 2024, totalling £311,613.58, to a management business based in Egypt, Servizon Limited”, controlled by Flanagan, while further payments totalling £42,505 were made to Flanagan personally.
When asked by Shaw whether Servizon was his company, Flanagan said that it was “a company in which I have an interest”. He later said that the interest was about 93 per cent.
“At a time when an entity that should not have been in your control was in your control, you denuded it of substantial cash,” Shaw said.
Douglas harbour on the Isle of Man. Flanagan is facing inquiries on the island
ALAMY
Flanagan denied this, arguing that the payments were “all valid and correct”. Some were for his own expenses; others involved the return of money to investors.
He rejected the contention that documents had apparently been backdated, saying that the company and its administrative staff had simply been catching up with paperwork.
Shaw accused him of trying to “explain away awkward documents by saying, ‘This was an oversight here’ or ‘This shouldn’t have been done’ or ‘This was incompetence there’.”
Flanagan described Shaw’s line of questioning as “a flight of fantasy”.
Shaw also raised Flanagan’s control of Artisan Hotels, which was founded by him and backed by the British taxpayer through a loan from the Future Fund, a scheme run by British Business Bank, a state-owned economic development bank.
An analysis compiled by Quantuma, the administrators over Wilton UK (Group), alleged that funds from the British Business Bank had been moved into Hartley Pensions. The Quantuma analysis also stated that the transaction was “problematic” and was “of significant concern and appears to be on direction instruction/in collaboration with Tony [Flanagan]”.
Shaw accused Flanagan of using Hartley Pensions and another subsidiary as his “piggy bank” to raise money “on a false prospectus” from the British Business Bank.
Flanagan insisted that he had actually tried to refuse the money from the British Business Bank. He also rejected the assertion that he had “defrauded the government’s Future Fund scheme”.
“We told them we didn’t want the money immediately. We said it’s a hotel project, we need to draw the money in stages,” Flanagan said.
Peter Kubik, one of several administrators or liquidators of various divisions of Flanagan’s now collapsed Wilton Group, set out in a witness statement how he had been working with the administrators of other companies “to conduct a forensic analysis of all transactions involving [Hartley Pensions]”.
He described it as “a complex and time-consuming process due to the disorganised and suspicious manner in which funds were transferred between various entities within the Wilton Group”. He also cited the lack of “documentation supporting repayments, such as loan or other agreements or redemption certificates”.
Kira King, a barrister acting on behalf of the liquidator of Hartley Pensions, told the court that Kubik accused Flanagan of misappropriating money from Hartley and of replenishing that money with funds that he stole — in Kubik’s characterisation — from a trust belonging to a “politically exposed person”.
Kubik — who was not in court to be cross-examined on his witness statement due to a scheduling conflict — put the full amount of “misappropriated money” at £25.8 million, which he said was taken from self-administered pension funds between January 2020 and October 2021.
He noted that “based on the documents I have reviewed, it is clear that Mr Flanagan was the primary driving force and decision-maker within the Wilton Group”.
In his view, “there is a clear lack of evidence to confirm that the misappropriated monies were taken lawfully”. He added that, at the time of his witness statement, it appeared that “certain sums of the misappropriated monies have been replenished over time”. Yet he was unable to “confirm at this stage whether they have been fully repaid”.
He pointed to a lack of adequate documentation, describing “the disorganised and suspicious manner in which funds were transferred between various entities within the Wilton Group”. He added that “interest redemption statements provided by Mr Michael Anthony Flanagan do not match the payments received into the various [Hartley Pensions] accounts”.
PwC noted that Wilton Isle of Man (Wiom), a subsidiary company, had been “conducting regulated activities in breach of anti-money laundering legislation” in the Isle of Man, which it described as being “a serious concern to us”
LAURA HUTTON/PHOTOCALL IRELAND
In his analysis, Kubik zeroed in on a particular payment of £13 million that was repaid to Hartley Pensions, which he described as the “primary payment in question”. That payment was made in April 2022.
Kubik said he had concerns about this payment, noting that it came from an Isle of Man-based trust which he said he believed was “established by individuals from Ukraine who may have connections with politically exposed persons [PEPs] from Ukraine”.
He said that the involvement of the trust “in repaying [Hartley Pensions] is troubling, and at this stage, I regard this as an anti-money laundering concern”.
He added that he had “seen allegations suggesting that the £13 million may have been stolen” from the trust and that “certain individuals (likely beneficiaries) of [the trust] may be suing Mr Flanagan over the misappropriation”.
When questioned by King, the barrister, Flanagan said the funds came from an Isle of Man trust called the Voula Settlement, which was connected to the Bondik family — led by the Ukrainian businessman Viktor Bondik — who have filed proceedings in the Isle of Man to recoup the money.
“The beneficiaries of the Voula Settlement are very concerned. They want their money back. I’m unable to return their money to them,” Flanagan said. “They’re mainly suing based on lack of information but they haven’t progressed [the case] and I’m in dialogue with their lawyers.”
In later questioning, he explained that “the Bondik family were heavily invested in the UK stock market and were unhappy with the risk and wanted to exit all stock market investments”.
Flanagan said that the purpose of the Bondik transaction was to replace the original funds that had been taken out of Hartley Pensions without consent. He said he was doing this “in accordance with the requirements of the FCA”.
There were further allegations about Wilton in the Isle of Man contained in documents submitted to the court by Michael Augousti, a business consultant who was a litigant in person on his own behalf in the case. Augousti claims he is also entitled to some of the disputed money at issue in the current case.
As part of his submissions, Augousti has entered a huge volume of documents to the court, including a pair of audits of Wilton’s Isle of Man subsidiary carried out two years ago by the financial services firm PwC.
In the reports, PwC noted that Wilton Isle of Man (Wiom), a subsidiary company, had been “conducting regulated activities in breach of anti-money laundering legislation” in the Isle of Man, which it described as being “a serious concern to us”.
PwC observed “expired, uncertified, illegible and in case of high-risk customers, insufficient [customer due diligence]”, which were “indicative of multiple breaches” of anti-money laundering codes.
As well as anti-money laundering issues, PwC claimed that sanctions checks were “either out of date, not complete, not comprehensive or not performed on all the relevant parties to the transaction”.
A second report by PwC noted that it was “a serious concern to us” that Wiom had shown “a high-risk appetite without evidence of the establishment and operation of appropriate procedures and controls” around anti-money laundering.
This was particularly illustrated by “Wiom accepting Isabel dos Santos as a client”, the report states. Dos Santos is the daughter of José Eduardo dos Santos, the former president of Angola, who ruled for 38 years. She has had $733 million in assets frozen by the High Court in London amid a lawsuit taken against her by the telecommunications firm Unitel. The company alleges that she was the beneficiary of loans made to her at below commercial rates.
Once described as Africa’s richest woman, Dos Santos denies the allegations, claiming that she is the target of a long-running political vendetta.
Flanagan completed his evidence on Friday, and the case continues.
