Abu Dhabi, UAEWednesday 19 June 2019

Former Barclays executive felt sick over 2008 Qatar deal, court hears

Four executives are on trial for fraud over capital raising during financial crisis

Roger Jenkins, former chairman of investment banking for the Middle East at Barclays, is on trial for fraud. Bloomberg
Roger Jenkins, former chairman of investment banking for the Middle East at Barclays, is on trial for fraud. Bloomberg

A former Barclays executive told in-house lawyers he felt sick when he was told the bank could be challenged by criminal authorities over side deals with Qatar during a 2008 emergency fundraising, a London fraud trial has been told.

Richard Boath, in the dock at Southwark Crown Court with former Barclays CEO John Varley and former senior colleagues Roger Jenkins and Tom Kalaris, used robust language when he told investigators in 2016 thought he thought Qatar should have been turned down when it demanded additional fees when helping bail the bank out.

The four men are charged with conspiracy to commit fraud by false representation over how they secured a two-part, 11 billion pound-plus capital raising as the bank scrambled to avoid a state bailout during the financial crisis.

The Serious Fraud Office (SFO), which is prosecuting the case, alleges the defendants misled shareholders and other investors by not disclosing that Barclays paid an extra 322 million pounds to Qatar through advisory service agreements (ASAs), which the SFO says were not genuine.

The men deny wrongdoing.

Extracts of transcripts of telephone conversations and emails were read out and shown to the court by the prosecution on Wednesday.

Former in-house Barclays lawyer Judith Shepherd told Mr Boath on June 18, 2008, that the bank had to show it had received valuable services from Qatar in return for the ASA - or risk other investors, the market regulator and criminal authorities viewing them as disguised commissions for the capital raising.

"I'm already feeling sick. There's no need to use all those words to make me feel sicker," Mr Boath responded in the telephone call, according to one transcript.

Eight years later, Mr Boath told SFO investigators that although he had not liked the Qatar deal, it had been negotiated by his seniors, approved by lawyers and that he thought the bank believed it would get value for the money.

"The lawyers persuaded themselves that even though they knew that the ASA in June was a consequence, a response to the request from the Qataris for additional fees, it didn't matter as long as we got value for services," Mr Boath, the bank's former head of European financial institutions group, told the SFO, according to interview transcripts read out to court.

Mr Boath said that Mr Jenkins, who was negotiating with the Gulf state, had "real heft" in Qatar and was a "big deal down there".

"I believed Roger would get his pound of flesh," he said, according to the transcripts.

"I don't think (former finance director) Chris Lucas or John Varley would ever have signed off on it if they thought that they were not going to get value for their services," he added in a recorded interview that was played to the court.

Asked by the SFO investigator if the ASA in June 2008 was a disguised commission, Boath replied: "No. The advisory service agreement was put in place by Barclays in exchange for services that they expected Roger to get value for."

"Judith goes on to say: 'Well, Big Dog will be in the dock first'," the SFO investigator noted in the 2016 interview.

"Yeah, that's Roger, by the way," Mr Boath said in the recorded SFO interview.

Mr Lucas has not been charged because he is too unwell to stand trial, the jury has been told. Ms Shepherd, the Barclays lawyer, and Qatar have not been accused of any wrongdoing.

Updated: March 7, 2019 12:02 PM

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