Barclays GroupMar 1 2019

Ex-Barclays boss slams SFO investigators

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Ex-Barclays boss slams SFO investigators

Tom Kalaris, 63, who ran the Barclays' wealth management arm claimed the SFO did not fully disclose documents to him which meant he could not recall certain events, Southwark Crown Court heard.

"The SFO has provided very limited disclosure to me of the core material in relation to this case," he said in a statement to SFO detectives.

"The documents that I have been shown by the SFO prior to this interview are wholly inadequate to enable me to properly or adequately refresh my memory.

"I did not initiate proposals for or have any decision making authority or responsibility for the disclosure of any information for either capital raisings or for the terms of such disclosure."

Kalaris, together with ex-chief executive John Varley, 62, and former colleagues – Roger Jenkins, 63, and 60-year-old Richard Boath – raised £11.8bn in emergency fundraising in 2008 for Qatar by making secret payments to the Gulf state in a separate agreement.

But the deal - which allowed the bank to avoid taking a taxpayer bailout - was allegedly financed through a separate agreement for services that the bank could then conceal from their own investors.

Jurors heard how Roger Jenkins, then Barclays Capital executive chairman of Investment Management in Middle East and North Africa also slammed the SFO investigation during his interview.

"Both the SFO and FCA wish to interview me in relation to the same subject over the space of one week.

"The more time that is taken by this SFO interview, the less time is available to me to prepare for my FCA interview," he said.

Jenkins explained to the interviewer that he believed that because both organisations had a mandate to investigate financial wrongdoing, both institutions routinely shared information.

"I am given to understand that this is an unprecedented situation - when properly considered, it is unfair to me.

"I had no responsibility for, nor did I make the decisions regarding, disclosure of either the June or October capital raising."

Varley told how his involvement with the Qatari deal had been limited and that when he became chief executive of the bank, he had aimed to decentralise the organisation in encouraging delegation.

"Of necessity, the chief executive cannot acquire full visibility, nor command the detailed work - there is nothing unusual in such a business model.

"This meant placing heavy reliance on the work of others. Barclays had the benefit of legal advice, I did not see that legal advice although there was reference to the legal advice during board meetings.

"I was aware that internal and external lawyers were heavily engaged in the June and October capital raising and I relied on our general counsel."

He told investigators that Barclays had rapidly expanded as he took over the bank, with the number of employees doubling from 77,000 in 2004 to 150,000 in 2008.

Varley explained that he had attempted to streamline the chain of command, setting up a group of managers covering all of Barclays different departments that answered directly to him.

"I could not and did not involve myself in the day-to-day running of the business heads' operations.

"At the peak of the financial crisis, my responsibilities included extensive political and regulatory engagement.

"The process whereby a public company engages in raises of capital, a process ultimately overseen by its board, requires intensive collaboration between experienced capital market professionals, working with internal and external lawyers, banks, brokers and other advisors.

"The Qataris had a reputation for being tough negotiators," explained Varley.

He told how the services agreement was: 'symbiotic with, but not dependent or conditional on, the Qatari capital raising.

"I did not regard the fee payment as connected to the capital raising, from a regulatory perspective the agreement was distinct and I received no contrary advice."

The jury heard how the bank's services agreement had been made primarily in return for Qatari assistance in accessing Middle Eastern oil and gas businesses.

At one point, the court heard, the Qataris became concerned and sought reassurance from then Prime Minister Gordon Brown that the government was not planning to intervene in the bank, fearing that their shares may be diluted as a result.

"I neither engaged in criminal conduct, nor did I sanction any criminal conduct," concluded Varley.

Glenn Leighton, who headed Barclays' financial institutions group and provided balance sheet advisories, said the Qatari capital raising and advisory service agreement fees were calculated together to form an "effective entry price."

He explained that such a calculation, where external factors would be 'baked in' to any calculations, was routine and did not imply that the services agreement was conditional on the Qatari's investing as part of the 2008 capital raising.

Mr Leighton explained that as part of the same calculation, other variables that might affect the price were also included, such the dollar to sterling exchange rate and the Libor rate.

The witness explained that Boath had tasked him with producing the model and they had conversations about how it should be calculated.

The jury were also read statements that were given by the defendants in interview during the Serious Fraud Office investigations.

Varley, of Notting Hill, Jenkins, of Malibu, California, Kalaris, of Knightsbridge, and Boath, of Henley-on-Thames, Oxfordshire, deny fraud by false representation, between May 1, 2008 and August 31, 2008.

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

The trial continues.