Barclays Group  

Court hears of ex-Barclays chief's involvement in Qatar deal

Court hears of ex-Barclays chief's involvement in Qatar deal

Jurors have heard a prospectus, which was supposed to include details about investors and how much Barclays was paying them, was signed off by chief executive John Varley.

Ex-chief executive John Varley, 62, and former colleagues – Roger Jenkins, 63, Tom Kalaris (pictured, left), 63, and 60-year-old Richard Boath – raised £11.8bn in emergency fundraising in 2008.

But the deal - which allowed the bank to avoid taking a taxpayer bailout - was allegedly covered up by the bankers to protect their enormous bonuses.

The prospectus for the deal claimed that Qatar Holdings was being paid the same amount of commission, namely 1.5 per cent, as every other investor.

In the document, the bank stated: "There are no further agreements or arrangements entered into between the investors and Barclays and Barclays has not agreed to, nor intends to pay any fees, commissions, costs, reimbursements or other amounts to the investors."

But yesterday (January 24) Ed Brown QC, prosecuting, told the jury that Varley knew of plans to sneak further payments to the Qataris through the agreement for 'advisory services.'

Marcus Agius, then chairman of the bank, commented: "This clause, and other similar clauses in relation to the other investors, was in effect an assurance by Barclays that any and all fees paid to Qatar Holding or Challenger for their participation in the capital raising would be disclosed in the subscription agreements of the prospectus."

Earlier jurors heard how 'Challenger' was the name of another Qatari company, for whom the beneficiary of any deal would be the Prime Minister of the country, Sheikh Hamad.

Varley even went so far as to sign an individual letter accepting responsibility for the prospectus that outlined the first round of capital raising.

He accepted: "There are no material facts or considerations omitted from the prospectus which to my knowledge would make any statement in the prospectus misleading and there is no other information known to me or which could, on reasonable enquiry, be known to me whose omission makes any statements or opinions in the prospectus misleading."

In an email to Agius, Varley tells the chairman that the Qatari deal: "Took longer than I had hoped, but these people are the new cocks of the roost."

Mr Brown added: "As we will see, the Qataris were the stronger party – they were the dominant party in a stronger position."

The prosecutor said once the deal with the Qataris had been agreed, the defendants knew that they would have to create a vehicle in which to hide the additional fees.

The prosecutor said the agreement with the Qataris had been made at a rate of 3.25 per cent as the commission.

Thereafter Mr Brown said the conspirators knew that they had to cover up the difference.

By that time, Boath and Kalaris had spoken of something needing to be "on the side."

Between them, the conspirators were forming the plan to create an Advisory Services Agreement as a mechanism to pay the Qataris their extra fee for investing in a way that would not be disclosed.