Boss accused of defrauding blind workers' pensions

The Pensions Regulator is investigating whether the owner of one of the UK's oldest social enterprises fraudulently failed to make disabled workers' pension contributions.

The 168-year-old soap maker Clarity was bought from administration in 2020.

Workers say they lost their jobs and are still owed redundancy payments, furlough money and wages.

The owner, Nicholas Marks said he looked forward to "clarifying the position" with the Regulator.

Olgun "Ozzie" Ibrahim caught Covid a week before Christmas 2020. By the time he recovered, he was told not to come back to work. He was put on furlough in January, and received two months furlough money but nothing more - no pension payments, and no notice period or redundancy when he finally lost his job in July.

Registered blind, he had worked for 29 years at Clarity & Co, a social enterprise which had been providing employment opportunities for blind and disabled people since 1854, making toiletries under the Clarity, the Soap Co. and Beco brands.

The business, whose patrons ranged from Queen Victoria to Joanna Lumley, was losing money, and it was put into administration in January 2020.

On the same day the business and its assets were bought by a businessman, Nicholas Marks, who now stands accused of not paying workers' wages and pensions.

Clarity had around 80 workers when it was sold, of whom 65 were blind, disabled, or had a health condition.

It was more than a job, says Mr Ibrahim, it was like a family too.

Since leaving, he and his fellow workers have struggled to find work. “No-one wants to employ disabled, blind people,” he says. “Though we can do the work, no-one wants to take the chance.”

The BBC has also spoken to a number of former Clarity employees who say pension contributions were deducted from their pay packets but were never paid to the pension provider, Scottish Widows.

Among them is former team leader Allan Brooks, who worked at the company for 17 years. Registered blind, he says he didn't receive furlough money or redundancy either.

When he heard he was losing his job, “it was a massive shock,” he says. “I was expecting to see my working days out at the company.”

He is now taking medication for depression, and hasn’t worked since he left. A number of his former colleagues are also suffering from mental health issues, Mr Ibrahim says.

The BBC has learned that The Pensions Regulator has begun an investigation into Nicholas Marks for alleged fraudulent evasion of the duty to pass on pension contributions to a workplace pension scheme, under the 1995 Pensions Act. The Pensions Regulator would not confirm or deny the investigation.

The UK Employment Tribunal website also lists judgements in favour of over 40 individuals who have won claims for unauthorised deduction of wages and other monies owed to workers by Clarity Products (the company's new name under Mr Marks's ownership).

The BBC has spoken to seven of them, who say they have not been paid the money the tribunal awarded.

Clarity Products - renamed Jublee Number 7 Ltd - is now being liquidated. Documents from the insolvency practitioners Quantuma, seen by the BBC, show the company owed more than £435,626 to 84 employees, including Mr Ibrahim and Mr Brooks.

Scottish Widows is owed £37,068 and NEST Pensions £15,494. The company's total debts amounted to more than £1.3m.

Local MP Sir Iain Duncan Smith wrote to the minister responsible, Jesse Norman, in November 2020 to highlight the case but HMRC cannot confirm or deny whether it has begun an investigation. HMRC is owed £231,839 by Jublee Number 7, the insolvency documents show.

In a statement, Mr Marks told the BBC: "I understand that there are some technical questions being asked by the Regulator as to the supply of certain documents. Whilst I was not involved with the detail of these, much if not all of this is attributable to the pandemic which left our offices being unmanned, correspondence going astray and the departure of staff whose responsibility it was to provide this information."

He also said he has personally lost around £500,000 and so "any suggestion that I took money out is both absurd and patently untrue."

He said that "During that chaotic period [following the sale, and during the pandemic] some people weren't paid. I'm sorry that happened but some workers were TUPE'd [transferred] over from offices that no longer existed and didn't have any roles. That's not an excuse but I'm trying to explain how we inherited a complete mess."

"For me, my biggest regret is that I couldn't save the business and the jobs but unforeseeable events conspired to make it an impossible task," the statement continued.

Mr Marks did not comment on whether he would repay any of the workers who are still owed money.

Little is known about Nicholas Marks. Born in 1967, he describes himself as British on Companies House, though he also has links with South Africa.

Nicholas Marks was banned from acting as a director of a company for a year from 3 August 2020 for infringements at another company, Stafferton Waste, which has since been dissolved.

He was subject to bankruptcy orders in 2007 and 2017, according to official notices published in the London Gazette.

Following reports on BBC News and elsewhere about the plight of former Clarity workers, Nicholas Marks sued two people for spreading what he claimed was false information about the company.

They were Camilla Marcus-Dew, Clarity’s former Head of Commercial, and Cemal Ezel, a social entrepreneur who made an unsuccessful bid to buy Clarity out of administration in 2020.

The pair - who deny Mr Marks’s allegations - initially had to represent themselves without legal advice. They are now represented on a pro bono basis by two law firms, Quinn Emanuel for Ms Marcus-Dew and Hausfeld for Mr Ezel.

Separately, on 27 January Ms Marcus-Dew was awarded £38,491 by an employment tribunal for constructive dismissal from Clarity, on top of £11,000 awarded earlier for unpaid wages (she has received nothing, she says).

Mr Ezel said that the ongoing litigation had forced him to scale back plans to expand his social enterprise, Change Please, a coffee business which provides opportunities and training for homeless people.

Social Enterprise UK has launched a crowdfunding campaign to support former workers and campaign for policy changes to prevent similar situations occurring in the future.

Nest Pensions, Scottish Widows and Quantuma all declined to comment.