Thursday 21 September 2017

Former Barclays bosses charged over Qatar rescue

Photo: PA
Photo: PA

Suzi Ring

Barclays and four former executives have been charged with conspiracy to commit fraud during the bank's 2008 capital-raising from Qatar as it sought to avoid a bailout amid one of the most turbulent periods in financial history.

The Serious Fraud Office said former CEO John Varley, former chairman of investment banking for the Middle East Roger Jenkins, ex-wealth chief Thomas Kalaris, and Richard Boath, the former European head of the bank's financial institutions group, face charges along with Barclays.

The four men are the most senior UK banking executives charged since the financial crisis, which sent banks across the globe scrambling to raise funds to cover billions in losses.

The case relates to the nature of £322m (€289m) in fees Barclays paid to the Qatar Investment Authority and a $3bn loan facility it made available to the nation as part of side deals to the £12bn fundraising from Qatari and other investors.

The five-year investigation is one of a number of lingering probes over the bank's behaviour dating back nearly a decade. Barclays has faced issues ranging from the rigging of key benchmark rates to more recent scandals related to how executives dealt with whistle-blowers.

The London-based bank said it is "considering its position" in relation to the allegations. Barclays said that one of its main subsidiaries may face additional charges in the case.

Mr Varley and Mr Jenkins face three counts of conspiracy to commit fraud by false representation and unlawful financial assistance. Mr Boath and Mr Kalaris each face one fraud count. A London court hearing is scheduled for July 3.

The charges relate to Barclays's capital arrangements with Qatar Holding LLC, a subsidiary of the emirate's QIA sovereign wealth fund, and Challenger Universal Ltd, an investment vehicle of the country's then prime minister.

The SFO, which Prime Minister Theresa May has threatened to fold into another crime agency, has delayed the charging decision at least twice since missing a March deadline.

In addition to the SFO, the Qatar deals are being reviewed by the Financial Conduct Authority (FCA), which re-opened its probe earlier this year after more documents came to light. The regulator had previously fined the bank £50m in relation to how it disclosed the fees paid to the Qataris. The FCA said that it was working closely with the SFO.

A lawyer for 61-year-old Jenkins said his client will "vigorously defend against these charges".

"As one might expect in the challenging circumstances of 2008, Mr Jenkins sought and received both internal and external legal advice on each and every subject mentioned in the accusations levelled by the SFO," said Brad Kaufman, Jenkins's US-based lawyer at Greenberg Traurig.

A lawyer for Mr Varley declined to comment, while a lawyer for Mr Kalaris didn't immediately respond to requests for comment. Mr Boath said in a statement he "was not a decision-maker and had no control over what the bank did in 2008".

"The SFO's decision to charge me is based on a false understanding of my role and the facts," Mr Boath said. "I repeatedly raised concerns about the decisions taken by the bank with both senior management and senior lawyers and was reassured that those decisions were lawful."

Mr Varley, 61, was appointed CEO in 2004 after starting his career at the bank in the 1980s. He presided over the lender during the 2008 financial crisis before handing the reigns to Bob Diamond in 2011. (Bloomberg)

Irish Independent

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