Ex-Barclays boss John Varley says £322m Qatar payment ‘not conditional’ on its involvement in the bank’s fundraising
The former chief executive of Barclays John Varley said the bank’s controversial £322m services agreements with Qatar were “not conditional” on the Gulf state’s participation in its financial crisis fundraising, a court heard today.
Varley, who is on trial for fraud alongside former colleagues Roger Jenkins, Tom Kalaris and Richard Boath, was in court to hear a statement he made to the Serious Fraud Office (SFO) read out by prosecutors.
The SFO accuse the four, who deny wrongdoing, of hiding fees of £322m in advisory services agreements (ASAs) with Qatar to induce it to participate in two make-or-break fundraisings at the height of the financial crisis.
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Varley had given a prepared statement to the SFO in 2014, but declined to answer any of its questions over the course of two interviews in 2014 and 2016.
In his statement Varley said the ASA with Qatar was “symbiotic with, but not dependent or conditional on, the Qatari’s participation in the capital raising”.
The first ASA in June 2008 was signed on the same day as the bank’s £4.4bn fundraising, of which the Qataris contributed £1.9bn.
The timing was “not a coincidence” and was in fact “intentionally simultaneous,” Varley said in his statement.
He said the ASA “committed the Qataris to a continuing commercial relationship,” which he said was a key part of his strategy for growing Barclays’ international business.
Jenkins, who also had a statement read to the court today by prosecutors, admitted the ASAs were a method of paying Qatar additional fees they requested.
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In negotiations for the June fundraising the Qataris had requested a fee equal to 1.75 per cent of the shares they subscribed to, on top of the 1.5 per cent fee that all underwriters were paid.
In his statement Jenkins said: “Barclays decided it could not pay the additional fees,” but instead decided to “satisfy the Qatari’s request … under an advisory services agreement.”
Jenkins said the bank’s leadership was happy to agree to the deal as it believed a services agreement with the gas-rich kingdom represented good commercial sense.
The “economic opportunity easily justified the fee … irrespective of the capital raising,” he said in his statement.
The case continues.