Fraud Retrial Begins For Former Barclays Execs

Three former Barclays executives are facing a retrial and accused of participating in a “dishonest mechanism” to pay Qatar extra fees in exchange for emergency fundraising to avoid a bank bailout during the financial crisis in 2008.

The Financial Times is reporting that on the first day of the retrial on Tuesday (Oct. 8) of Roger Jenkins, Tom Kalaris and Richard Boath, prosecutors told a jury that the men agreed to pay the Qataris £322 million in exchange for them helping with two emergency cash raises.

A fourth man named Chris Lucas would have been charged as well but he’s sick and not fit to stand trial. The U.K.’s Serious Fraud Office (SFO) also originally charged the bank itself, but those charges were jettisoned.

The emergency fundraising involved Qatar Holding, which is a division of the country’s sovereign wealth fund, and Sheikh Hamad bin Jassim bin Jabr al-Thani, who at the time was prime minister. The three executives agreed to hide facts “to preserve the future of the bank and to preserve their own positions,” according to the prosecution.

The men, who claim innocence, are charged with conspiracy to defraud and substantive fraud offenses, which carries penalties of 10 years in prison.

The bank allegedly looked to the Middle East twice in 2008, once in June and once in October. They raised £11.2 billion to not have to deal with a government bailout, which the men felt would come with conditions they didn’t want the bank to have to deal with.

Qatar provided the bank with about £4 billion total. However, the Qataris demanded twice the fees that the board had said it would pay all of the investors.

“They were faced with a dilemma: insist on paying Qatar no more in commission fees than it was paying to all the other investors and likely fail to get the vital Qatari investment home, or agree to pay the Qataris more commission without telling the other investors and to find a dishonest way to disguise and hide that fact,” said Edward Brown QC for the U.K.’s Serious Fraud Office.

The men went with the latter option, Brown said.

The men used “advisory service agreements” that promised money to Qatar in return for help in the region, but the agreements were false, the SFO said.

The trial is expected to last up to five months.