Barclays, former bosses charged
• The four men are the most senior UK banking executives accused since 2008 financial crisis, which sent banks scrambling for funds
Barclays and four former executives have been charged with conspiracy to commit fraud during the bank’s 2008 capital raising from Qatar as it sought to avoid a bail-out amid one of the most turbulent periods in financial history.
Barclays and four former executives have been charged with conspiracy to commit fraud during the bank’s 2008 capital raising from Qatar as it sought to avoid a bail-out amid one of the most turbulent periods in financial history.
The Serious Fraud Office (SFO) said on Tuesday former CE John Varley, former chairman of investment banking for the Middle East Roger Jenkins, ex-wealth chief Thomas Kalaris and Richard Boath, the former European head of the bank’s financial institutions group, face charges along with Barclays.
The four men are the most senior UK banking executives charged since the financial crisis that sent banks across the globe scrambling to raise funds to cover billions in losses.
The case relates to the nature of £322m in fees Barclays paid to the Qatar Investment Authority and a $3bn loan facility it made available to the nation as part of side deals to the £12bn fundraising from Qatari and other investors.
FIVE-YEAR PROBE
The five-year investigation is one of a number of lingering probes over the bank’s behaviour, dating back nearly a decade. Since the financial crisis, Barclays has faced issues ranging from the rigging of key benchmark rates to more recent scandals about how executives dealt with whistle-blowers.
The London-based bank said it was “considering its position” regarding the allegations. Barclays said one of its main subsidiaries might face additional charges in the case.
Varley and Jenkins face three counts of conspiracy to commit fraud by false representation and unlawful financial assistance. Boath and Kalaris each face one fraud count.
A London court hearing is scheduled for July 3.
The charges relate to Barclays’s capital arrangements with Qatar Holding, a subsidiary of the emirate’s QIA sovereign wealth fund, and Challenger Universal, an investment vehicle of the country’s then prime minister.
The SFO, which Prime Minister Theresa May has threatened to fold into another crime agency, delayed the charging decision at least twice since missing a March deadline.
In addition to the SFO, the Qatar deals are being reviewed by the Financial Conduct Authority (FCA), which reopened its probe earlier in 2017 after more documents came to light. The regulator had previously fined the bank £50m over the way it disclosed the fees paid to the Qataris. The FCA said it was working closely with the SFO.
CHALLENGES
A lawyer for Jenkins, 61, said his client would “vigorously defend against these charges”.
“As one might expect in the challenging circumstances of 2008, Jenkins sought and received internal and external legal advice on every subject mentioned in the accusations levelled by the SFO,” said Brad Kaufman, Jenkins’s US-based lawyer at Greenberg Traurig.
A lawyer for Varley declined to comment, while a lawyer for Kalaris did not immediately respond to requests for comment. Boath said he “was not a decision-maker and had no control over what the bank did in 2008”.
“The SFO’s decision to charge me is based on a false understanding of my role and the facts,” Boath said. “I repeatedly raised concerns about the decisions taken by the bank with senior management and senior lawyers and was reassured that those decisions were lawful.”
Varley, 61, was appointed Barclays’s CEO in 2004. He presided over the lender during the 2008 financial crisis before handing the reigns to Bob Diamond in 2011.
Jenkins, who lives in Malibu, worked most of his career at the lender in roles including running a structured capital markets business that developed tax arbitrage strategies for clients.
INVESTMENT BANK
Boath, 58, worked in Barclays’s investment bank for 15 years, most recently as co-head of the lender’s Europe, Middle East and Africa business. He left the bank in 2016. Kalaris, 61, joined Barclays in 1996 after 18 years at JPMorgan Chase & Co.
His roles at the British bank have included heading its American business and wealth management unit and he was appointed to Barclays’s executive committee in 2009.
Several former executives were interviewed by the SFO, but did not face charges.
The SFO found there were reasons to investigate Chris Lucas, the bank’s group finance director, but opted not to pursue the matter because of the 56-year-old’s health issues, according to two people familiar with the probe. Lucas’s lawyer declined to comment.
While Diamond, another one-time CEO, and former senior Barclays lawyers Mark Harding, Judith Shepherd and Matthew Dobson were within the scope of the investigation, the SFO also decided not to file charges against them, said the people, who asked not to be identified because the documents are not public.
A spokesman for Diamond and a lawyer for Harding declined to comment, while a lawyer for Dobson did not immediately respond to requests for comment.
“Judith Shepherd has always strongly maintained her innocence,” her lawyer, Neill Blundell at Eversheds, said.