UT (Tax & Chancery) UT-2022-0000150 - [2024] UKUT 00254 (TCC)

There were signs of a financial crash in early 2008, and by May of that year it was evident that the world was on the brink of a crisis, and that financial institutions needed to raise capital to avoid risking collapse. At the time, Mr John Varley was Barclays’ CEO, Mr Chris Lucas was its CFO and Mr Paul Emney its COO.

Barclays’ Board decided that very large sums of money needed to be raised to support the bank, and in June 2008 undertook to raise capital. The exercise was engineered by the Barclays Corporate Development team and its Capital Markets team, led by Mr Richard Boath. Mr Kalaris was brought in to help co-ordinate the process, which involved ensuring, in his own words, that “everything and everyone was as joined up as possible and that all relevant senior management were kept informed and all relevant people were involved in any decisions to be made”.

Barclays’ strategy was to try and secure a lead SWF investor to participate in the capital raising, because it was felt that as soon as one significant investor committed, others would have the confidence to follow suit. Barclays approached a number of possible SWFs, including the Qatar Investment Authority (“the Qataris”). The potential investors were given code names based on species of bird, with the Qataris being “Quail”.

On 28 May 2008, Barclays decided it would pay 1.5% underwriting commission on the capital raising. However, by at least 15 May 2008, it was also considering ways of “sweetening” the deal for “cornerstone investors”, including by using a memorandum of understanding (“MoU”) specific to the investor in question.