Kevin John Kirkwood (39), Gary Quillan (48), and Gregory Gerard Garrett (49) were banned by the High Court after they were found to have misled investors.

The two companies at the centre of the case were G Loans and KJK Investments. Kevin Kirkwood was the registered director of Liverpool-based KJK Investments, which was run by shadow director Gary Quillan, while Gary Quillan’s brother-in-law, Gregory Garrett, was director of G Loans, based in Windermere.

The court heard that the companies operated what is commonly known as a “pension liberation” scheme. Clients seeking a loan were offered one by G Loans, on condition they simultaneously invest their existing pension in KJK Investments shares – the value of that investment being typically twice the value of the loan they received.

KJK Investments advertised a potential 6 per cent annual return on the investment and it was intended that the client’s pension would be used to repay the loan upon retirement.

Over 30 months, KJK Investments received £11.9m in investments from 209 people. The court heard that KJK Investments loaned roughly half of this money to G Loans, on uncommercial terms, to enable it to make the loans to clients. Investors were, in effect, being loaned their own money.

KJK Investments used the remaining funds received through the scheme on sales commissions, worth £900,000, and director salaries of just under £500,000 as well as making loans to other companies on uncommercial terms.

Adding insult to injury, due to the failure of directors to follow tax advice, the companies’ clients were exposed to tax charges amounting to as much as 55 per cent of the loan they received.

On becoming aware of the scheme, the Insolvency Service undertook an investigation that resulted in both companies being wound up in the public interest in April 2015 following a petition to the court.

Passing judgement in the Manchester High Court on 18 September 2019, District Judge Obodai found that the directors had misled investors and deliberately caused the companies to obscure the relationship they had with each other, calling the scheme a “house of cards”.

Kevin John Kirkwood was handed a 10-year ban, while Gary Quillan and Gregory Garrett both received 12-year disqualification orders.

Alex Deane, chief investigator for the Insolvency Service, said: “None of the directors expressed any real regret for deliberately misleading people who were mainly small pension investors, and who were targeted because they were unable to get credit and required cash.

“Pension liberation is being widely promoted as an easy way of gaining early access to pension savings. Any schemes offering such benefits should be viewed with caution and independent financial advice should always be sought before entering into such a scheme.”