Fraud probe into illicit Qatari fees ‘fell short’

▶ Judge criticises UK investigators in trial of Barclays bankers accused of secret funding deal with Doha

The UK’s top fraud investigation agency failed to take the proper steps to secure key documents from the lawyers of Qatari investors before the trial of four bankers accused of making secret payments worth £322 million (Dh1.5 billion).

A judge said the documents would “almost certainly” contain discussions of the deal in which Qatar’s ruling family and sovereign wealth fund paid £4bn to keep Barclays Bank in private hands during the 2008 financial crisis.

The terms of the deal between Qatar and Barclays are at the heart of the case against the four senior bankers.

But investigators from the Serious Fraud Office failed to take all “reasonable and appropriate” steps to secure the documents, the judge ruled in January.

Judge Robert Jay’s criticisms of the investigation were revealed at the end of the sevenweek prosecution case against the former executives.

The four include the bank’s main Middle East dealmaker Roger Jenkins and former chief executive John Varley, the most senior banker to be put on trial in connection with the crash.

Qatar provided the largest tranche of the £11bn of capital raising sought by the bank in 2008, but with rates of commission more than double that of other investors, which was kept secret from the markets, a London court heard.

Details of the money were allegedly disguised as payments for future unspecified services from the Qataris to help Barclays build their businesses in the Middle East.

The trial focused on whether the agreements were a sham to cover illicit payments to the Qataris, or whether they expected to receive services in return.

The trial heard that the bankers believed Barclays would fold without the investment from Qatar’s sovereign wealth fund and an investment vehicle under the control of its former prime minister, Sheikh Hamad bin Jassim Al Thani.

Richard Boath, one of the four defendants and the former European head at Barclays, and a senior legal official for the bank, are heard on a recording of a phone call laughing at the suggestion that Sheikh Hamad would provide advisory services.

The lawyer talked about “his excellency doing some work, supposedly” before adding he should not say that or risk a “smack” from another inhouse lawyer.

A fraud investigator working on the investigation asked Mr Boath in 2016 if he was laughing because “services from Sheikh Hamad are unlikely”.

Mr Boath responded: “No I’m laughing at him [the lawyer]. I don’t know why I’m laughing. I think I’m laughing at his humour.”

He told the investigator that the Qatari team was impossible to deal with and that he did not entirely trust them.

Mr Boath said one Qatari official ranted over attempts by Barclays to detail the services that would be supplied.

The officials later settled on a much more brief and vague agreement that Mr Boath described to colleagues as ugly.

He said it was plausible that Mr Jenkins’ good relations with Sheikh Hamad would mean the bank would receive services in return for the multimillionpound fees but accepted it would not be a “slam dunk”.

“The last thing Roger is going to do is sit down with HBJ [Sheikh Hamad] and make him write it all down on a bit of paper,” Mr Boath said. “HBJ’s going to say, ‘Get out of here’.”

He described Sheikh Hamad as the critical figure in the negotiations.

“He ran the country,” Mr Boath said.

If Sheikh Hamad “said it was Tuesday, it was Tuesday”, he said in an interview transcript.

The court heard no Qatari person or entity was ever formally accused in the five-year investigation, which was dragged out for two years because of legal wrangling over an initial refusal to hand over documents.

Mr Jay’s criticism of the agency’s failure to secure documents from the Qatari side came in a ruling only weeks before the trial was to start.

Mr Varley, Mr Jenkins, Mr Boath and Thomas Kalaris, the former head of Barclays wealth management division, are accused of conspiracy to commit fraud by false deception.

The defence case is scheduled to start on April 1.