Procedural matters

Goldman Sachs International (GSI) had an established employee benefit trust. In 1997 it awarded options over shares in another company (X) to employees of Goldman Sachs Services Ltd (GSSL) although they worked for GSI.

The shares were redeemable at the option of company X. When the options were granted they were not valuable but various payments were made to company X which made its shares increase in value. Most of the options were exercised by the relevant employees and those shares were redeemed by company X.

Employees of GSSL owned the vast majority of the redeemed shares but in June 1999 some GSSL employees became employees of GSI. This meant that some of the options had been granted to employees of GSSL but exercised by and redeemed to employees of GSI.

GSSL and GSI maintained that the transactions did not give rise to any National...