InvestmentsJul 4 2017

Barclays execs in dock on fraud charges

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Barclays execs in dock on fraud charges

Former chief executive John Varley and three of his senior colleagues – Roger Jenkins, Tom Kalaris and Richard Boath – allegedly raised £11.8bn in emergency fundraising in 2008.

The deal - which allowed the bank to avoid taking a taxpayer bailout - was the subject of a five-year investigation by the Serious Fraud Office.

It is the first time criminal proceedings have been launched against any senior bankers for events surrounding the financial crisis.

Kalaris and Jenkins were required to pay securities of £500,000 each as part of their bail.

Varley and Boath were granted unconditional bail.

The four former executives sat in the dock at Westminster Magistrates' Court on Monday (3 July) during the 45 minute hearing.

The charges relate to two fundraisings the bank organised in June and October 2008 through two investment vehicles connected to Qatar - Qatar Holding LLC and Challenger Universal Ltd.

One was used by the then-Qatari prime minister, Sheikh Hamad bin Jassim bin Jaber al-Thani, and a $3bn (£2.3bn) loan advanced to Qatar in November 2008.

Varley, Jenkins, Kalaris, all 61, and Boath, 58, are charged with one count of fraud by false representation, between 1 May 2008 and 31 August 2008.

The charge alleges they conspired together with Barclays Plc '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.'

Varley, Jenkins and the bank face a second like charge of fraud by false representation, between 1 September 2008 and 30 November 2008.

The charge alleges they conspired together with Barclays Plc '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'.

Varley, Jenkins and Barclays face a further charge of providing unlawful financial assistance through the loan.

Edward Brown QC, prosecuting, said: 'There are four charges in total, each of the defendants is charged with the first charge.

"Three defendants, Barclays, Varley and Jenkins are charged on count two, conspiracy to defraud.

"Count three only applies to Barclays, giving unlawful financial assistance.

"Count 4 applies to Varley and Jenkins being an officer in default of a company giving unlawful financial assistance.

"The investigation has been going on for a number of years and each of the defendants have cooperated with the administration of the case.

"They are plainly serious charges that must be litigated."

Addressing the four defendants, Magistrate Emma Arbuthnot said: "Your next appearance will be at Southwark Crown Court.

"You must attend on 17 July if you don't attend you will be arrested and brought to court in custody."

Jenkins left Barclays in 2009 and was famously once paid £40 million in a single year by the bank.He is now based in Malibu, California.

Varley was chief executive of Barclays until the end of 2010.

Kalaris, a London-based US citizen, ran the wealth management arm of Barclays.

Boath is the former head of the bank’s European financial institutions group.Barclays said on Tuesday that the US justice department and Securities and Exchange Commission is also investigating these agreements, and that the Financial Conduct Authority had investigated.