Abu Dhabi, UAEThursday 21 November 2019

Barclays executives paid Qatar twice for ‘bogus’ services

The £322m in payments were designed to hide that other investors had secured worse terms, court hears

Former Barclays Middle East investment banking chief Roger Jenkins faces allegations of fraud over payments to Qatar. Bloomberg  
Former Barclays Middle East investment banking chief Roger Jenkins faces allegations of fraud over payments to Qatar. Bloomberg  

Three former Barclays executives agreed to pay Qatar twice for “bogus” advisory services to cover the fact they were sweeteners for a deal with the Gulf state to invest billions in the stricken bank, a court heard on Wednesday.

The UK bank agreed to pay Qatar £280 million for services just 16 weeks after striking a similar arrangement worth £42m to Doha that largely covered the same period, said prosecutor Edward Brown.

Qatar eventually invested more than a third of the £11 billion raised by the stricken bank during two fund raising operations. The fundraising, at the height of the global financial crisis, allowed the bank to stave off the threat of a UK government takeover.

“Having announced publicly that it was not going to take government money, it was imperative for Barclays to ensure the Qatari investment in late October 2008,” said Mr Brown. “Failure to do so at that time would have had very serious consequences for the bank.”

The jury has heard that Qatar demanded higher commission payments than any other investor as the price of taking part in the fund-raising operation.

Other investors included the UAE, which put in £3.5 billion but with rates of commission that were less than half of those secured by Qatar, the court has heard.

The two advisory agreements committed Barclays to paying £322m in return for Qatar supplying services that included introducing new investors and expanding the work of Barclays across the Middle East. But prosecutors say the deal included only vague demands and was a “smokescreen” to disguise the higher commission payments.

Roger Jenkins, the former head of investment banking in the Middle East, and ex-finance director Chris Lucas lied to investors by not disclosing the fees in official documents presented to the markets, according to a UK anti-fraud agency which is bringing the criminal case.

The former head of wealth management, Tom Kalaris, and Richard Boath, then-head of the financial services group in the region, were allegedly part of the conspiracy for the first of the deals.

Mr Lucas is too ill to stand trial while the three men in the dock have denied fraud.

The court was told that Mr Jenkins negotiated a £25m bonus for his role in securing the Qatari funds in 2008.

He led discussions with then-Prime Minister Sheikh Hamad bin Jassim bin Jaber Al Thani which resulted in the investments from the state’s sovereign wealth fund and the leader’s own investment vehicle.

When the second capital raising was approved, Mr Jenkins emailed a colleague to argue that he should be given a special bonus for saving the bank.

“This capital did the trick,” he said in an email shown to the jury. The bank offered to pay Mr Jenkins the money in March 2009 with a “special award”.

Mr Jenkins was interviewed by the Serious Fraud Office in 2014. He declined to answer questions but said in a statement that the agreements had been approved by senior managers including the chief executive John Varley.

Updated: October 16, 2019 06:58 PM

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