UT (Tax & Chancery) UT/000097/2023 - [2025] UKUT 00211 (TCC)

The Authority has made an application dated 25 March 2025 for permission to amend its statement of case and to amend the formulation of the preliminary issue in this case. The preliminary issue is listed to be heard on 29 July 2025. The Applicant has objected to both applications in a reply dated 25 April 2025. The Authority responded on 9 May 2025 and the Applicant made a further reply on 16 May 2025. I have dealt with the applications on paper taking into account all the submissions made.

The Authority proposes to amend the statement of case to reflect the fact that it no longer seeks to pursue a financial penalty against the Applicant. It has reached that decision following a request from the Danish Tax Authority. The Danish Tax Authority has stated that if the Authority pursues a financial penalty, its civil proceedings against the Applicant and others to recover their losses could be prejudiced. In January 2025 the Danish Tax Authority obtained judgments against the Applicant in Dubai finding him jointly and severally liable for approximately £71m. In the circumstances the Authority has determined that it is no longer in the public interest to pursue a penalty against the Applicant. The Authority has made clear that it has not altered its view of the Applicant’s conduct or that he should be prohibited from performing any function in relation to any regulated activities.

The Authority’s position in relation to the prohibition and the financial penalty is set out at [5A] of the proposed amended statement of case as follows:

The proposed amendment removes references to section 66 Financial Services and Markets Act 2000 (“FSMA 2000”) and to the Authority’s Statement of Principle 1. Allegations that the Applicant dishonestly participated in the Purported Trading are retained as is the allegation that his conduct was dishonest and lacked integrity. The particulars of those allegations have not changed. References to a limitation issue in connection with the financial penalty have been removed together with the basis on which the financial penalty had been calculated. In the conclusion at [139] the Authority invites the Tribunal to take certain action. The amended statement of case removes a request that the Tribunal should determine that Principle 1 had been breached and that it was appropriate to impose a penalty of £5,951,754. A request that the Tribunal should dismiss the reference in relation to the prohibition is maintained and a request is added that the Tribunal should direct the Authority not to impose any penalty on the Applicant.

The proposed amendment to the terms of the preliminary issue set out in my direction released on 18 February 2025 removes the question of whether the Authority was acting as a Qualifications Body within the meaning of section 54 Equality Act 2010 when it purported to exercise its powers to impose a penalty on the Applicant pursuant to section 66 FSMA 2000 such that its actions fell within the restrictions on discrimination in section 53 Equality Act 2010. The amended preliminary issue would therefore read as follows:

The Applicant objects to the Authority’s application to amend its statement of case and to its application to amend the preliminary issue. I shall consider each objection separately.