QinetiQ tax oversight costs retail investors

The £1.3bn listing of state-controlled defence group QinetiQ has been dragged
into further controversy after claims that retail investors will be not be able
to include their investments in ISAs.

According to The Daily Telegraph, the group’s prospectus prevents
shareholders from buying shares with their ISAs. The prospectus states that
ordinary shares will be offered to certain institutional investors. For taxation
purposes this means that the stock is not widely available, which excludes the
option of using an ISA.

Marketing director at Brewin Dolphin, Charlotte Black, said this showed that
the Ministry of Defence was reluctant to open the IPO to retail investors.

‘They claimed that this issue was open to private investors but it is not,’
Black was quoted as saying. ‘It is frustrating for clients because they have to
take the stock and then buy it back in the secondary market into their ISA,
incurring a cost.’

Angela Knight, CEO of private investor and broker group Apcims, said the
blame lay with QinetiQ’s advisers.

‘This is an unnecessary and stupid error. You can’t put it in your ISA at
float – it is an unnecessary mistake,’ said Knight.

A QinetiQ spokesman, however, said there had been no oversight, because the
offering had always been planned as an institutional placing.

‘It cannot be an error because there was not a retail or intermediary offer
in the first place. We don’t have a retail offer with a guaranteed
retail tranche. Whether it is ISA-ble or not, retail brokers have got access to
the float,’ the spokesman told The Telegraph.

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