'If they found out they'll go completely nuts,' Barclays exec said of allegedly fraudulent £4 billion deal with Qatar
- Former Barclays executive Roger Jenkins said he wouldn't sacrifice himself to save the jobs of then-CEO John Varley and former president Bob Diamond if a £4 billion investment in the bank went wrong, a London trial heard today.
- The executives all believed that the deal would save Barclays from collapse at the height of the financial crisis in 2008. But Jenkins feared the deal might have legal consequences, the court heard.
- "Well fuck that, I'm not taking a hit to save John and Bob's jobs. Fuck that," Jenkins allegedly said.
- Jenkins, Varley, and fellow executives Richard Boath and Tom Kalaris have all pleaded not guilty to charges of fraud. Varley potentially faces 10 years in prison if convicted.
A senior Barclays executive claimed he wouldn't sacrifice himself to save the jobs of then CEO John Varley and former president Bob Diamond if capital-raising negotiations at the height of the financial crisis fell apart, a London jury heard today.
"Well fuck that, I'm not taking a hit to save John and Bob's jobs. Fuck that," the court heard that Roger Jenkins said. The quote from the former executive chairman of investment management in the Middle East and North Africa came in written testimony to the Serious Fraud Office by former Barclays Capital executive Richard Boath, in 2o14.
The implication is that Jenkins was afraid the deal might be toxic enough to generate legal consequences that would land on his doorstep.
The executives believed, during the darkest part of the global financial crisis, that if they failed to persuade a set of Qatari investors to give them £4 billion then Barclays might collapse. Other banks - Lehman Brothers, Bear Stearns and Northern Rock - had gone to the wall at the time.
The SFO alleges that Varley and other executives - Boath, Thomas Kalaris, and Roger Jenkins - misled investors in the deal by using "advisory services agreements" (ASAs). The SFO alleges that the side-deals paid Qatari companies £322 million ($423 million) - a 3.25% commission - in fees during the capital raisings, which were unfairly not disclosed to other investors.
The defendants have pleaded not guilty to all charges. Bob Diamond is not accused of any wrongdoing.
Jenkins received a £25 million bonus for his role in the fundraising, given his close relationship with the Qatari investors. During a conversation between Jenkins and Boath in 2008, the two executives discussed the viability of paying Qatari investors additional fees, adding up to a larger sum than other investors received, the court heard.
Boath said: "We can't do a capital markets transaction where we give one set of fees to the market or to one set of investors, and ... have a different set of economics for another set of investors because if they found out they'll go completely nuts. You can't do that."
The interview with the SFO indicates that there were numerous discussions about the way in which the Qataris could be paid, with Boath at one point getting frustrated by the prospect of an ASA being used. "Tell them to get stuffed. Let's do something else," the jury heard.
Read more: See all our coverage of the Barclays Qatar trial here.
Previously, the court heard that Thomas Kalaris, formerly head of Barclays Wealth Management said, "None of us wants to go to jail here." He was referring to a draft of the agreement. Boath responded, "it ain't worth it and apparently the food sucks." Kalaris then added: "No the food sucks and the sex is worse."
In his interview with the SFO, Boath made it clear that there "wasn't a genuine concern about going to jail at all," and that his conversation with Kalaris was simply "a joke." He also claimed that his anxiety about the ASA deal "disappeared" after he learned that senior bank executives had consulted external legal advice about the agreements and the services provided.
"How could senior people at the top of their profession at a global bank like Barclays have agreed to this without some verification of the services?" Boath said.
The trial at Southwark Crown court is ongoing.