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

Also on 25 June 2008, Barclays announced that it was raising new capital. Of the total £4bn raised, the Qataris invested about £1.4bn and received a 6.4% stake in Barclays. Both the announcement of the share issue, and the related Prospectus included this passage:

“SMBC [Sumitomo Mitsui Banking Corporation] has agreed to subscribe for the Firm Placed Shares and Qatar Investment Authority, Challenger, China Development Bank, Temasek and the Further Placees have agreed to subscribe for the Open Offer Shares to the extent, other than in the case of China Development Bank’s Open Offer Entitlement, not taken up by Qualifying Shareholders. The Board believes that this is an important endorsement of Barclays longterm strategy and vision, and underscores the confidence of these institutions in Barclays and in its management team. Barclays is also pleased to have entered into an agreement for the provision of advisory services by Qatar Investment Authority to Barclays in the Middle East and to have agreed to explore opportunities for a co-operative business relationship with SMBC. The Board welcomes the support of Qatar Investment Authority, Challenger, SMBC, China Development Bank and Temasek as important investors while ensuring that the Open Offer structure allows existing Shareholders to participate in the issue of the Open Offer Shares on a pre-emptive basis.”

As Mr Kalaris accepted in the course of cross-examination, this passage in the Prospectus simply recorded that an agreement had been made between Barclays and the Qataris for the latter to provide advisory services.

Under the heading “Further information on the Investors”, the Prospectus included this passage:

“Qatar Investment Authority

Qatar Investment Authority was originally founded by the State of Qatar in 2005 to strengthen the country’s economy by diversifying into new asset classes. Building upon the heritage of investments dating back more than three decades, its growing portfolio of long-term strategic investments complement the State of Qatar’s wealth in natural resources. Qatar Investment Authority’s investment in Barclays is being made by its wholly owned subsidiary Qatar Holding, which was incorporated in April 2006 within the jurisdiction of Qatar Financial Centre as the prime vehicle for strategic and direct investments by the State of Qatar. Headquartered in the Qatar Financial Centre, Qatar Holding is structured to operate at the very highest levels of global investing, with a planned presence in all major capital markets. Barclays and Qatar Holding have entered into an agreement for the provision of advisory services by Qatar Holding to Barclays in the Middle East.”

Under the heading “Material Contracts”, the Prospectus first explained what was meant by that term:

“The following are all of the contracts (not being contracts entered into in the ordinary course of business) that have been entered into by members of the Group: (i) within the two years immediately preceding the date of this document which are, or may be, material to the Group; or (ii) at any time and contain obligations or entitlements which are, or may be, material to the Group as at the date of this document.”

The Prospectus then described the subscription agreements entered into by SMBC and China Development Bank. This passage then followed:

“Qatar Subscription Agreement

On 25 June 2008 Barclays and Qatar Holding entered into a subscription agreement (the “Qatar Subscription Agreement”). The Qatar Subscription Agreement sets out the terms and conditions pursuant to which Barclays will, conditional only upon Admission, allot to Qatar Holding the Qatar Subscription Shares at the Issue Price of 282 pence per share. In consideration for agreeing to subscribe for the Qatar Subscription Shares, Barclays undertakes to pay Qatar Holding a commission equal to the product of 1.5 per cent. and the maximum number of Open Offer Shares for which Qatar Holding might be obliged to subscribe, being 625,426,689 New Ordinary Shares, at the Issue Price. The consideration for the allotment and issue of the Qatar Subscription Shares shall be the payment by Qatar Holding of an amount equal to the product of the Issue Price and the number of Qatar Subscription Shares. The Qatar Subscription Agreement contains customary warranties and undertakings.”

The Prospectus did not include the ASA as a “material contract”. As set out above, it contained two, essentially identical, statements about the ASA: