CL-2018-000297, CL-2018-000404, CL-2018-000590, - [2025] EWHC 2364 (Comm)

Mr Klar accepted that he knew at the time that this was improper and that it involved deliberately providing false information to the bank. He said he did what he did to make sure Salgado could pay its clients what was due to them from Klar Model trading after Caledonian Bank, Salgado’s previous bank, collapsed and, fearing a lengthy process if the true ownership structure of Salgado was shown to Global Fidelity, he wanted to get Salgado’s funds out quickly. He said in his oral evidence at trial that Salgado had about US$10 million at Caledonian, the vast majority of which (in his mind) was due to Salgado’s clients, and he was “concerned that if I didn’t take control, let’s say, of the role of Salgado in the liquidation [of Caledonian] that the money would not get distributed the way it should be and that’s why I portrayed myself as the director and the shareholder, rather than portraying, as was indeed the case, Mr Moray Stuart as the director … and the charitable trust as the shareholder …”. Mr Klar accepted that that did not justify what he did, but insisted that, ultimately, he was not trying by it to cheat anyone out of anything. I accept that evidence.

Those dishonest actions notwithstanding, my assessment was, and is, that Mr Klar had indeed persuaded himself during the relevant period to the view that merely contracting to acquire shares, if the trade did not fail and dividend-based income arose under it, might be sufficient under some systems to give rise to a tax refund claim; and that Denmark was one of those systems. SKAT noted that, taken to its extreme, Mr Klar’s claimed belief entailed that he could conjure up tax refund entitlements simply by creating trading records and accounting book entries for entities all controlled by himself and acting at his direction. I do not think that is correct, because that kind of complete self-dealing might well be viewed as truly sham. Whether for tactical reasons or otherwise, SKAT chose not to take that point against Mr Klar at trial as regards Klar Model trading as actually implemented. In any event, Mr Klar acknowledged the logic of SKAT’s suggestion, and I considered that he was being truthful in saying that was his thinking during the relevant period, fantastical though I think that should have seemed to him at the time.