Abu Dhabi, UAEThursday 13 August 2020

Barclays faces new £1.6 billion battle over Qatar injections

Financier Amanda Staveley brought claim in English courts over secret commission deal

Financier Amanda Staveley is suing Barclays Bank for up to £1.6 billion. Getty
Financier Amanda Staveley is suing Barclays Bank for up to £1.6 billion. Getty

Barclays Bank faces a damaging £1.6 billion legal battle over claims that the bank repeatedly lied to secure investment from Gulf investors during the 2008 global financial crisis despite the acquittal of senior executives after a related fraud probe.

The conclusion of the criminal case against the three men opens the way for financier Amanda Staveley to press her claim for up to £1.6 billion against the three-century-old bank over suggestions that Qatar was secretly offered preferential terms to other institutional investors.

Ms Staveley’s company PCP Capital Partners invested £3.5 billion in Barclays on behalf of a senior Abu Dhabi investor during a capital raising operation that concluded in November 2008.

The deal effectively put 30 per cent of the bank’s stock in the hands of Middle East investors. Ms Staveley was paid £30 million for her work on the deal but she alleges PCP and its Gulf-based backers lost out on up to £1.6 billion.

The long-running trial ended in not-guilty verdicts for three former Barclays employees connected to the deals. The court heard that Qatar was paid a £66 million “introduction” fee for its alleged role in linking up the bank with UAE investors.

But Ms Staveley says that her company PCP Capital contacted the bank’s then chief executive John Varley on October 12, 2008, offering him the opportunity to speak with her Abu Dhabi investor.

She had raised the prospect of investing in a UK bank to her Abu Dhabi investor in June 2008 and personally discussed terms at a reception in the UAE capital in November 2008, according to court documents.

The day after Ms Staveley first raised the prospect of Abu Dhabi’s involvement, Barclays announced that it needed to raise £6.5 billion, court papers show.

She alleges that she was assured during meetings with the Barclays Middle East investment chief, Roger Jenkins – who was acquitted of fraud on Friday - that the UAE and Qatar would be treated in the same way. Mr Jenkins is not a party to the PCP action and no longer works for Barclays.

She says that at a 6.15am meeting at Barclays headquarters on October 31, 2008 – the day that the second tranche of capital injected into the bank was announced – Mr Jenkins allegedly told her that the £66m was related to an earlier funding round, when the UAE was not involved.

A jury on Friday cleared Mr Jenkins and two other men of duping the markets by lying about secret commissions to ensure that Qatar put £4 billion into the bank over the course of 2008 to prevent a government bailout of the bank.

The group of investors gathered by Ms Staveley – which included funds and senior figures from Saudi Arabia, Abu Dhabi, China and Kuwait – were also kept in the dark about a $3 billion loan made by Barclays to Qatar, the papers claim.

Public companies in the UK are banned from lending money for the purchase of their own shares.

The money was paid into the London branch of Qatar National Bank on November 17 - just ten days before the emirate for its Barclays stock.

Lawyers acting for the bank quit in November 2008 after raising concerns that the loan to Qatar was illegal, according to the legal papers filed by Ms Staveley’s company.

Barclays Bank was charged in 2017 with fraud and unlawful financial assistance over the loan but the case against the bank was later dropped.

PCP alleges its leadership did not realise that it “had very substantially greater bargaining power than it ever realised” over Barclays as it thrashed out the deal, the papers say.

Barclays has previously said that it will defend the claim against Ms Staveley but declined to comment further on Thursday.

A spokesperson for PCP said: "The criminal case brought by the SFO against Jenkins, Kalaris and Boath involved different issues, tried before different tribunals, with different parties and different standards of proof.

"PCP's claim is not brought against individuals at the bank. It is brought against the bank itself for civil liability. PCP's claim is not impacted by the outcome of the criminal trial."

Updated: February 28, 2020 07:14 PM

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