Barclays boss feared payments to Qataris could be seen as a ‘bung’
A Barclays boss feared that fees paid by the bank to Qatari investors might be see as a “bung”, a court was told today.
Richard Boath, one of four former Barclays executives charged with conspiracy to commit fraud, told investigators two advisory services agreements (ASAs) that form the crux of the Serious Fraud Office’s (SFO) case were a “mechanism to pay the Qataris additional fees”.
The SFO claims Barclays bankers used the ASAs to pay Qatar’s sovereign wealth fund and its former Prime Minister £322m as part of an inflated fee in exchange for a crucial investment that saved the bank from a government bailout at the height of the financial crisis.
Prosecutors allege the ASAs allowed Barclays to pay Doha an effective commissioning fee of 3.25 per cent during two capital raising drives in 2008, while only disclosing a 1.5 per cent rate – the amount it paid to other investors – on the official prospectus for the fundraising.
Boath, the bank’s former European financial institutions group head, has been charged with conspiracy to commit fraud alongside former chief executive John Varley, wealth management boss Tom Kalaris and head of Middle East and north Africa investment Roger Jenkins.
The Barclays trial so far:
- Ex-Barclays executives ‘made secret Qatar payments to avoid government bailout’, court told
- ‘The food sucks and the sex is worse’: Barclays fraud trial execs joked about prison
- Bailout fears kept Barclays banker ‘up at 2am’
- Barclays ‘big dog’ pushed for £25m special payment after Qatari cash mission
Varley and Jenkins face charges of conspiracy to commit fraud through the use of both ASAs struck with the Qataris during 2008, while Kalaris and Boath face a single charge, relating to the first agreement. All four have pleaded not guilty, and claim the ASAs were “genuine”.
During lengthy interviews with the SFO, described to the jury at Southwark Crown Court yesterday, Boath alleged that lawyers at Barclays were aware that the ASAs were being used to cover the higher fee which the Qataris had pushed for.
In a call with the bank’s top internal lawyer, which was recorded as he was a trader, Boath worried about how media might react to the ASAs.
“My worry is every journalist just gets it and says this is you know…” he said, adding: “I hate to use the phrase so I’m not going to use it… it begins with a ‘B’.”
Boath told SFO investigators that the ‘B’ word referred to a “bung”, the jury heard.
Ed Brown closed his opening remarks for the prosecution today, with the SFO s preparing to call its first witness tomorrow. The trial is expected to continue for up to six months.