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Abu Dhabi, UAETuesday 19 March 2019

Barclays' Jenkins refused to take fall for Varley, official said

Ex-Barclays Middle East head was considering how to channel money that Qatar sought before it would invest in the bank at the height of the 2008 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

Former Barclays Middle East head Roger Jenkins said he was not willing to take the fall for the then chief executive John Varley when he found out that a side-deal to bribe Qatar could cause problems, another former official at the bank told investigators.

The tension among the UK bank executives now caught up in a landmark London fraud trial was disclosed during the interview of one of the defendants, Richard Boath, by investigators at Serious Fraud Office (SFO) in 2014. Extracts of that interview were played to a London jury on Monday. During the 2014 questioning, Boath had recalled his conversations with Jenkins, who was considering how to channel money that Qatar sought before it would invest in the ailing bank at the height of the 2008 financial crisis.

Boath said neither of them felt it was worth doing the deal just to protect Varley and former investment bank head Bob Diamond, who may have lost their jobs if the UK government had stepped in.

The fees money, however, was more than double what other investors were offered during the fundraising, and Jenkins had asked Boath to find the best way to pay the fees.

The 322 million pounds (Dh1.56bn) in fees ensured that Qatar would make an investment of 4 billion pounds in Barclays. Now, in the first UK trial of any top banker connected to the financial crisis, Varley, Jenkins, Boath, and former Barclays wealth management boss Tom Kalaris are accused of dishonestly hiding the fees from other investors. They deny any wrongdoing.

Boath told Jenkins that Barclays could either give Qatar free advice on mergers and acquisitions, lower-than-usual fees to issue bonds or an advisory agreement, which meant that the Gulf nation would need to deliver genuine services to the bank.

Qatari officials were happy to go ahead with an advisory deal as a way of receiving the fees, Boath recalled Jenkins as saying. While Boath said the idea had actually come from someone on his own team, he still had reservations about the plan.

Hang on, Roger

"I said, ‘Hang on, Roger,’” Boath told the investigators in the 2014 interviews. “We can’t do a transaction in which we give one set of fees to the market or to one set of economics for one group of investors and we have a different set of economics for another set of invests, because if they found out they’ll go completely nuts. You can’t do that. We can’t do that.’ I was quite vigorous, because I felt it quite strongly."

Jenkins then agreed that it was not worth the risk, Boath told the SFO.

Boath said neither of them felt it was worth doing the deal just to protect Varley and Diamond.

“I’m not taking a hit to save John and Bob’s job,” Boath recalled Jenkins saying. Diamond is not accused of wrongdoing.

After the two escalated the matter, Barclays’ then general counsel Mark Harding signed off on the arrangement as long as the bank received sufficient value from the advisory deal, Boath said. Because senior figures and legal officials of the bank had all agreed to the arrangement, Boath was happy for it to go ahead, he told the investigators on Monday.

“Very clear legal instruction was given," Boath said. "And it was repeated throughout the transaction in conversations that I had with people in group legal. I’d been told that Mark Harding was all over it. [Harding's deputy] Judith Shepherd is now all over it. I can relax."

The SFO has identified chief financial officer Lucas as a co-conspirator, but he is too ill to stand trial. Harding, Shepherd and other lawyers involved have not been accused of wrongdoing.

Updated: March 5, 2019 11:46 AM

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