From: David Grier <DGrier@mcr.uk.

com>
Date: 17 August 2011
To: "Craig Whyte (ctw@libertycapital.biz)" <ctw@libertycapital.biz>
Cc: "phil.betts@virgin.net" <phil.betts@virgin.net>, "gary.withey@collyerbristow.com"
<gary.withey@collyerbristow.com>, Michael Bills <MBills@mcr.uk.com>

Craig,

We have attached a letter received from HMRC in response to the proposal for a time to pay which
includes a requirement for a freeze of interest and charges along with a reduction in the previously
applied charges.

You will see that HMRC have rejected this proposal and I have today had a follow up conversation to
determine what shape of proposal may be acceptable. In outline HMRC would consider a proposal
that contains that following elements.

1. An immediate payment of 1m.

2. A time to pay proposal for no longer than 12 months.

Please also note the comments from HMRC in relation to the shareholder statements.

I have commented that we will discuss this further at our meeting on Monday 22 August 2011.

Regards,

David

David Grier
Partner
MCR

From: Craig Whyte <ctw@libertycapital.biz>
Date: 17 August 2011
To: Gary Withey <gary.withey@collyerbristow.com>


Obviously now urgent that this is appealed and we get the injunction!

From: <phil.betts@virgin.net>
Date: 17 August 2011 09:32
To: David Grier <Dgrier@mcr.uk.com>, Craig Whyte <ctw@libertycapital.biz>
Cc: Gary Withey <gary.withey@collyerbristow.com>, Michael Bills - MCR email
<MBills@mcr.uk.com>


Hi David

What is the up to date amount?

Regards
Phil
Sent from my BlackBerry wireless device

From: David Grier <DGrier@mcr.uk.com>
Date: Wed, 17 Aug 2011
To: 'Craig Whyte (ctw@libertycapital.biz)'<ctw@libertycapital.biz>
Cc: 'phil.betts@virgin.net'<phil.betts@virgin.net>;
'gary.withey@collyerbristow.com'<gary.withey@collyerbristow.com>;
MichaelBills<MBills@mcr.uk.com>
Subject: HMRC update


From: David Grier <DGrier@mcr.uk.com>
Date: 17 August 2011
To: "phil.betts@virgin.net" <phil.betts@virgin.net>, Craig Whyte <ctw@libertycapital.biz>
Cc: Gary Withey <gary.withey@collyerbristow.com>, Michael Bills <MBills@mcr.uk.com>


Phil,

The base amount is 1.9m plus interest and charges of 1.1m, this brings that total due to c3m.

We understand that HMRC have assessed the penalty at 1.3m.

Regards,

David


From: <phil.betts@virgin.net>
Date: 17 August 2011
To: David Grier <Dgrier@mcr.uk.com>, Craig Whyte <ctw@libertycapital.biz>
Cc: Gary Withey <gary.withey@collyerbristow.com>, Michael Bills - MCR email
<MBills@mcr.uk.com>


Hi David

Can we change the time of the meeting on Monday from 10.00 to say 11.00 or 11.30?

Can we all meet on Friday morning, in London, to discuss how we handle this as I am reluctant to go
into the 'lions den' on Monday without being fully briefed and prepared.

Regards
Phil
Sent from my BlackBerry wireless device

From: David Grier <DGrier@mcr.uk.com>
Date: Wed, 17 Aug 2011
To: 'phil.betts@virgin.net'<phil.betts@virgin.net>; 'Craig Whyte'<ctw@libertycapital.biz>
Cc: 'Gary Withey'<gary.withey@collyerbristow.com>; Michael Bills<MBills@mcr.uk.com>
Subject: RE: HMRC update

Phil,

No scope to change the time of the meeting, but happy to meet on Friday.


Regards,

David

From: <phil.betts@virgin.net>
Date: 18 August 2011
To: David Grier <Dgrier@mcr.uk.com>, Craig Whyte <ctw@libertycapital.biz>


Ok

Can you tell me what the revised proposal is please.


Thanks
Phil
Sent from my BlackBerry wireless device


From: David Grier <DGrier@mcr.uk.com>
Date: 18 August 2011 05:46
To: "phil.betts@virgin.net" <phil.betts@virgin.net>
Cc: "ctw@libertycapital.biz" <ctw@libertycapital.biz>


Times are for tomorrow.

The proposal is as follows:


1. An immediate payment to HMRC of 400k.

2. Monthly repayments of 200k from November 2011 for three months until January 2012.

3. Monthly repayment of 250k from February 2012 until September 2012.


Regards,

David


From: Philip Betts <phil.betts@virgin.net>
Date: 19 August 2011
To: David Grier <DGrier@mcr.uk.com>
Cc: "ctw@libertycapital.biz Whyte" <ctw@libertycapital.biz>


Have you actually made this proposal?

Wouldn't a slightly higher up front payment followed by 100k pm over 24 months be more sensible.

See you later.
Phil


On 18 Aug 2011, at 11:13, David Grier wrote:


Yes the current liability is 3m but there is an unspecified amount in respect of a penalty.

On the mobile if you want to discuss.

Regards,

David

From: Philip Betts <phil.betts@virgin.net>
Date: 19 August 2011 05:30
To: David Grier <DGrier@mcr.uk.com>
Cc: "ctw@libertycapital.biz" <ctw@libertycapital.biz>


Ok, but can we afford it.

Phil.