- Barclays executives were "rumbled" by Qatari investors during the bank's emergency fundraising during the financial crisis in 2008.
- The bank is alleged to have created a internal memo which was designed to provide a misleading "audit trail," prosecution argued in their case against the executives for their role in the crises-era events.
- Alongside tough negotiations with Qatari investors, Barclays executives suggested they also had difficult negotiations with Chinese investors: "These Chinese are porking us," the court heard.
- The defendants, including the bank's former CEO John Varley and coworkers Roger Jenkins, Thomas Kalaris, and Richard Boath, have all pleaded not guilty to all charges.
Key Barclays executives were "rumbled" by their negotiations with Qatari investors during the bank's capital raising exercise during the financial crisis, a Southwark Crown Court heard Friday.
It's week one of the case - the UK's Serious Fraud Office alleges that then CEO John Varley and the three other defendants, Richard Boath, Thomas Kalaris, and Roger Jenkins, misled investors in fundraisings during the financial crisis by paying the Qataris £322 million in secret fees that were not properly disclosed.
The defendants pleaded not guilty to all charges.
The prosecution alleges that Barclays executives were concerned about their dealings with the Qataris and made repeated references to spending time in jail, a continuation of recorded conversations that were played to the courtroom Thursday.
"Rumbled"
"There's obviously the jeopardy is that we're rumbled and people say well that was bullshit, you know, this is just a fee in the backdoor," said Richard Boath, then the European head of Barclays' financial institutions group, in a call to Thomas Kalaris, who headed the bank's wealth division at the time, on June 11 2008, which was played to the court.
The jury also heard Kalaris say, in the same call: "I don't want to go to jail."
It was also alleged that Barclays had created an internal memo on June 13, 2008 about their dealings with Qatar which came into existence in an attempt to lay a misleading "audit trail," according to the prosecution.
The memo cites that the Qataris "would be content with the fees of 1.5% for their £2 billion commitment…" which the prosecution alleges was misleading.
Further to that, the court heard a phone conversation between Richard Boath, and two senior lawyers at Barclays Judith Shepherd and Matthew Dobson on June 18, 2008. During the call Boath admits to deleting an email from Sheikh Hamad, one of the potential Qatari investors, about the extra fees.
In additional talks between Boath and Roger Jenkins, played to the court from later that June 2008 day, they discussed the possibility of re-engaging other investors at a higher fee level so as to avoid paying the Qataris a higher fee than other investors.
Boath said: "I think the best thing to do is, Chinese don't come in, we basically start again, we get the Chinese back at the table, 3% fees, Chinese come in, everybody comes in, we disclose 3% fees, we don't have any of this shit, none of us is going to be jailed."
Former CEO John Varley was brought up as part of discussions centered on the bank's potential agreement with Qatar, which included the possibility of Sheikh Hamad, the prime minister of Qatar, providing advisory services.
Jenkins said: "It's wrong of a Prime Minister to take a fee…for his advice to a bank" in another call played to the jury from June 18, 2008.
Jenkins added: "I'm very surprised that John Varley, given his ethics, is doing this."
Phone conversations between Shepherd and Boath on June 23 2008, which were played to the court, discussed the terms between Barclays and Qatar in the proposed "advisory services agreement."
The Qataris were unhappy with the proposed wording, Boath said: "He doesn't like it, won't sign it, they're not having any of that crap in it."
Shepherd outlined that Sheikh Hamad would have to give the services in exchange for the fee because "otherwise you are going to end up in front of the Fraud Squad explaining why." To which Boath responded "No, I've got a house in Brazil, there's no extradition treaty, I'm off."
The trial at Southwark Crown Court is ongoing and could last up to six months.