Wednesday, October 28, 2020

Barclays executives tried to hide fraudulent Qatar payment as advisory fee


Prosecutors for the Serious Fraud Office (SFO) say attempts by former Barclays bank bosses to show advisory services provided by Qatar were merely a “smoke-screen” to try to “legitimise” fraudulent payments to the Gulf state in 2008.

A jury at the Old Bailey in London heard that former banking executives tried to gather evidence that would show that payments to Qatar were made in exchange for genuine advisory services, rather than a way of disguising illegitimate fees worth £322m.

The SFO prosecutor Edward Brown said: “It is clear that there were some ‘after the event’ attempts to demonstrate that some services had been provided. These did not come close to justifying the huge amounts paid over to the Qataris and, you may well conclude, were nothing more than a smoke-screen to seek to legitimise what had gone before.”

Three former Barclays bankers – the ex-investment banking chief Roger Jenkins, the former head of the wealth division Thomas Kalaris, and Richard Boath, a former head of Barclays’ European financial institutions – are accused of lying to the stock market and other investors about how £322m was paid to Qatar in exchange for the Gulf state’s participation in an emergency fundraising of more than £11bn at the height of the banking crisis in 2008.

- Advertisement -

The SFO alleges the trio put together two “advisory services agreements” (ASAs) to hide the payments. Those fees were not offered to other investors but were demanded by Qatar, whose investment was considered vital to keeping the bank afloat and out of government control during the financial crisis. Qatar would end up investing £3.95bn in Barclays that year.

The fees effectively meant Qatar was able to purchase Barclays shares at a heavily discounted price of 130p per share, on average. That is compared with the 282p per share price offered to other investors in the first capital raising exercise in June 2008, the prosecution said.

Brown told the jury, during the second day of proceedings, that the former executives would defend the arrangement by saying it was signed off by Barclays’ lawyers. However, the SFO alleges the banking bosses also misled their lawyers about the true intent of the payments.

He said: “The defendants rely upon suggestions that the lawyers signed off on the use of the ASAs as part of their defence in this case – to suggest that they were given legal sanction for the course that they took.

- Advertisement -

“Before you accept such a suggestion, you will want to consider whether the evidence shows that the lawyers involved [in] these events ever approved of the use of the ASAs as mechanisms to hide what remained commission fees paid to the Qataris.”

Brown added: “Lawyers were told that it was a genuine agreement for genuine services, at a market value, provided by the Qataris – and sanctioned it as such. The prosecution case is this was not true.”

Jenkins, Kalaris and Boath all face charges of fraud and conspiracy to commit fraud. All three deny the charges.

A previous trial involving all three executives came to a close in April, when the jury was discharged after four months of court proceedings. The former Barclays chief executive John Varley was a co-defendant in that trial but he was acquitted.

The trial is expected to last four to five months.

Source: The Guardian


Nigerian court declines to issue international arrest warrant for fugitive ex-Petroleum Minister in corruption case

The Abuja Division of the Federal High Court, on Wednesday, refused an application by the Economic and Financial Crimes Commission, EFCC, for an arrest...

South Korea’s former Vice Justice Minister sentenced to jail for bribery and sexual favors

Former Vice Justice Minister Kim Hak-eui, the figure at the center of one of Korea’s biggest political sex scandals, was placed under pretrial detention...

Beam Suntory Inc. fined $19.6 million in foreign bribery case

Beam Suntory Inc. (Beam), a Chicago-based company that produces and sells distilled beverages, has agreed to pay a criminal monetary penalty of $19,572,885 to...

Julius Baer to deny two former CEOs their bonuses over money laundering scandal

Julius Baer will withhold millions of francs in bonuses from its former chief executives Boris Collardi and Bernhard Hodler, as a result of a...

Goldman Sachs executives to cover part payments of $3 billion fines in 1MDB scandal

Nine current or former Goldman Sachs executives, including CEO David Solomon, will have to pay back hundreds of millions of dollars in compensation over...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World


Latest News

This Week

Spanish police arrests operator of Crypto Arbitrage firm Arbistar on fraud charges

The CEO of Arbistar the Spanish investment company, Santiago Fuentes, has been arrested and arraigned on charges of fraud, belonging to a criminal organization...

Macau to sign agreement with World Bank Group over money laundering risk assessment

Secretary for Security Wong Sio Chak was granted powers by the Chief executive to sign a Reimbursable Advisory Services Agreement Concerning Risk Assessment of...

Former Blue Bell Creameries CEO indicted for fraud linked to 2015 listeria outbreak

The former president and CEO of Blue Bell Creameries L.P., a Texas ice cream company, was indicted Tuesday on wire fraud charges in connection with a scheme...

Judge opposed dismissal of bribery charge against former Portage mayor Synder

A judge denied Thursday two motions to dismiss a soliciting bribes charge former Portage Mayor James Snyder will be retried on, according to court...

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks