The Barclays chief, his brother-in-law and a £542m fraud
Now Staley’s accused of interfering in crisis-hit deal
EMBATTLED Barclays boss Jes Staley is facing fresh controversy after helping his brother-in-law in a £542m investment deal that went sour amid accusations of fraud.
The row comes just days before an annual meeting where 60-year-old Staley is likely to face tough questions about a separate whistleblowing scandal.
It will spark new concerns about the banker’s future and could do further harm to his already tarnished reputation.
Staley is locked in a battle with major client KKR over Brazilian data company Aceco, which was founded by the family of his wife Debora. She and her brother Jorge Nitzan sold most of their stake to private equity giant KKR in 2014 – pocketing £124m and £62m respectively, according to the Wall Street Journal. Aceco went on to suffer disastrously when the Brazilian economy nose-dived a year later. KKR is fighting a legal battle against Nitzan and fellow sellers in an effort to get its money back, claiming they were victims of a fraud. There is no suggestion Staley was involved in this but KKR is angry because it claims he vouched for Nitzan in a conversation with two of its co-investors. KKR claims that his behaviour was against its interests as a client of Barclays. Staley, however, has insisted he was acting in a personal capacity, has done nothing wrong and was trying to help a family member.
A KKR spokesman said it was trying to stick up for its investors as it believed they ‘were defrauded in the sale of Aceco’. KKR bosses were sent an anonymous email in May 2015 which claimed Aceco’s books had been cooked for the previous three years. KKR fired Nitzan in late 2015 and last year wrote off the value of its investment. Nitzan has called the accusations of fraud ‘baseless’, claiming that Aceco was instead damaged by the worst recession in the nation’s history.
In the autumn, the company fell behind on repayments of a £66m debt. Some of this was bought by Nitzan in a bid to recover control of the company as a creditor – infuriating KKR.
One of its bosses made a ‘confrontational’ call to Staley in September to ask if he could influence his brother-in-law, but he refused. Soon afterwards, the Barclays chief executive told an old friend, investor Timothy Collins, that he should consider backing Aceco and that Nitzan was a ‘good guy’.
A bank spokesman said: ‘Appropriate senior personnel within Barclays have been kept informed about this matter.’
It follows revelations Staley wrongly sought to unmask a whistleblower who complained about the way a former colleague of his was hired by the bank.
A spokesman for Staley’s brother-in-law said: ‘Mr Nitzan is confident that the truth will prevail and that the accusations will be fully clarified in arbitration.’