AN UNDISCHARGED bankrupt who preyed on struggling businesses as a “white knight” had also ruined dozens of pensioners by stealing £2.9 million from a pension fund.

Kevin Sykes, 45, was sentenced this week to four years in prison for fraudulent trading after one of the biggest investigations by the Department of Trade and Industry. He was also disqualified from acting as a director for 15 years.

Judge Alan Hitching, sitting at Blackfriars Crown Court, called Sykes “a menace to other people”. Sykes, who has had 94 companies wound up by the DTI, had offered his services to poorly performing companies as a “business doctor”.

Sykes wrote false invoices, making a shell company the ailing firm’s biggest creditor. He then charged the firm extortionate sums for the return of the hidden cash, making it difficult for creditors to reclaim the money they were owed.

Separately, Sykes received an eight-year sentence last year for plundering the pension fund for CW Cheney, a lockmaker in Birmingham. The sentences will run concurrently.

Reporting restrictions were imposed on the trial at Birmingham Crown Court last year because of the DTI’s prosecution of Sykes. Sykes and four others acquired Cheney for £175,000 in 1999, intending to loot its pension fund, then worth more than £2.9 million.

The firm, which had been operating for more than 100 years, was sold to a number of shell companies. Within five months of the acquisition, Sykes had stolen £750,000 from the pension fund.

In September 2000 Cheney was sold to another firm owned by Ian Selby, one of Sykes’s co-accused, as the men began to steal £2.2 million from the fund. But the following month, an independent actuary contacted the Occupational Pensions Regulatory Authority. The regulator contacted the police and Serious Fraud Office.

Following the money trail

Dec 1999: Sykes and his accomplices buy Cheney

April 2000: Cheney is sold to Cumberland Leasing, controlled by Sykes, and £750,000 stolen from fund

July 2000: Cheney is sold to Portcullis, another company owned by Sykes

Sep 2000: Cheney is sold to a company run by Sykes’s accomplices

Oct 2000: £2.2 million is stolen from Cheney fund

Nov 2000: regulators and police are alerted

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax