Tuesday 19 February 2019 7:04 pm | Updated: Monday 03 June 2019 12:40 am

Ex-Barclays chairman Marcus Agius testifies in Qatar fundraising fraud trial

Former Barclays chairman Marcus Agius appeared as a witness at Southwark Crown Court today in the historic trial of four senior bankers accused of fraud for their actions at the height of the financial crisis.

Agius is the first heavyweight banker to appear as a witness in a trial connected to the 2008 crash, more than 11 years after the collapse of the US housing market sent shockwaves through the world’s financial system.

Agius said Barclays was unprepared for how hard the credit crunch would hit the financial sector.

“In June 2008 we at Barclays did not anticipate how much worse things were going to get,” he said. “I don’t think we thought it was going to go as badly as it ultimately did.”

“The level of uncertainty generally in the market was intense. Companies had already failed. In this country, we all remember Northern Rock. In America, an investment bank called Bear Stearns had failed in the spring of 2008,” he told the jury.

“It was an extremely uncertain febrile period,” he said.

Agius, who is not accused of any wrongdoing, was appearing as the first witness at the trial of former Barclays chief executive John Varley and senior bankers Richard Boath,Tom Kalaris and Roger Jenkins.

The Serious Fraud Office have accused the four, who deny the charges, of covering up £322m in fees Barclays paid to Qatar during the course of two 2008 emergency fundraisings that raised £12bn for the bank.

Agius said he was unaware of any additional fees paid to Qatar during the 2008 fundraisings.

"Paying commission to one set of underwriters and not others would’ve been unacceptable to the market," Agius said.

Barclays first raised money from Qatar via a rights issue in June 2008 before the full scale of the crash became apparent.

In October 2008, as the crisis deepened, the government asked banks to dramatically raise their capital ratios, forcing Barclays to choose between raising funds privately and a state bailout.

Agius said the bank decided not to take state funds which, “to put it mildly was a big call,” instead hoping government action would stabilise the system, allowing the bank to raise money from the stock market.

However, when Barclays’ brokers sounded out underwriters they received a negative response, leading to the decision to return to the Qataris for a further fundraising.

Jenkins and Varley deny two counts of fraud by false representation connected to two fundraisings in June and October 2008. Boath and Kalaris both deny one count over the June fundraising. The trial continues.