Three former senior Barclays executives lied during the financial crisis to secure billions of pounds of secret funding from Qatar, a court heard today.
Bankers Roger Jenkins, 64, Tom Kalaris, 63, and Richard Boath, 60, raised £322million in emergency fundraising from two Qatari investors amid worldwide financial chaos, jurors were told.
Prosecutors allege they hid considerably higher fees in order to bolster confidence in the bank and avoid state support back in 2008.
Jenkins was the former executive chairman of Barclays Capital while Kalaris, a London-based US citizen, ran the wealth management arm of the bank.
Boath was in charge of the Barclays European financial institutions group.
All three former banking chiefs are on trial at the Old Bailey in London and deny conspiracy to commit fraud by false representation in relation to the emergency fundraising.
Three former senior Barclays executives lied during the financial crisis to secure billions of pounds of secret funding from Qatar. Pictured is Roger Jenkins, 64, seen in January outside Southwark Crown Court
Those investors who provided funding include Qatar Holdings, an arm of the Gulf state’s sovereign wealth fund.
Opening the case today, prosecutor Edward Brown QC said the defendants agreed that lies should be told to the market to ensure that vital investments into Barclays were secured amid the global banking crisis.
He said: ‘The lies that they told concerned the true terms of two very large investments being made into the bank by the Qataris.
‘At the time of crisis in 2008, Barclays turned to Qatar to secure investment that was fundamental to its future.
‘In this case, the price agreed and then paid by Barclays to Qatar for investing was considerably higher than that paid to other investors for their investment into Barclays.’
Mr Brown said that paying one investor more than another went against established banking practice and would not have been accepted by the other investors.
He said the defendants faced a ‘dilemma’ – insist on paying Qatar no more in commission fees that it was paying to others and risk failing to get the vital investment, or agree to pay more commission without telling the other investors and to find a dishonest way to hide that fact.
Mr Brown told jurors: ‘These defendants, a small cadre of very senior executives, and another – a director at the bank – agreed to pursue the second option.
‘The Qatari investment had to be achieved and this meant telling lies.’
Bankers Roger Jenkins, 64, Tom Kalaris (left in January outside Southwark Crown Court), 63, and Richard Boath, 60, (right outside same court) raised £322million in emergency fundraising from two Qatari investors amid worldwide financial chaos, jurors were told
The defendants allegedly knew that details of the investments would be published in public documents.
Mr Brown said It was a fundamental rule of good banking practice that these documents tell the truth so that all investors know the terms on which they are investing and that shareholders know the true position.
He alleged the defendants knew these documents contained lies about the true position in relation to the Qataris, making it a criminal offence.
The prosecutor said: ‘They acted dishonestly in order to preserve the future of the bank and to preserve their own positions.
‘These defendants were intelligent and highly placed bankers. Together they devised a mechanism, a pretend agreement, which was an attempt to disguise the additional payments that they were making to the Qataris.
‘In short, they pretended that the additional commission fees that they were paying to the Qataris for their, the Qatari, investments were actually fees for a separate, commercially valuable, genuine ‘Advisory Services Agreements’.
‘The prosecution alleges that these agreements were an invention, used as a means to hide the additional fees that were in truth being paid to the Qataris for investing.
‘It was into two ‘Advisory Services Agreements’ that the defendants put what were in truth fees for investing and they were party to the claim that the Qataris were paid what everyone else was.’
Jenkins, of Malibu, California, Kalaris, of Knightsbridge, and Boath, of Henley-on-Thames, Oxfordshire, deny two charges of fraud by false representation, between 1 May 2008 and 31 August 2008.
The charge alleges they conspired together ‘to commit fraud by making a false representation, namely within documents relating to Barclays’ capital raising of June 2008, intending to make a gain, namely or cause loss to another, or exposing another to a risk of loss.’
Jenkins also denies two like charges of fraud by false representation, between 1 September 2008 and 30 November 2008.
The charge alleges he conspired together ‘to commit fraud by making a false representation, namely within documents relating to Barclays’ capital raising of October 2008, intending to make a gain, namely or cause loss to another, or exposing another to a risk of loss’.
The trial continues.
Source : Mail Online