Ex-Qatar PM Helped Barclays Take Advantage of Doha’s Wealth

A British court looking into bribery and fraud claims between Qatar and Barclays Bank said the bank wanted to take advantage of Qatar's wealth, although its management did not consider it an important country.

During a fraud trial on Tuesday, the former chairman of Barclays, Marcus Agius, admitted that Qatar was “not as central” to the bank’s plans to fundraise billions in 2008.

During the 2008 banking crisis, the bank was facing the threat of being nationalized and it needed extra funding.

The case is being prosecuted by the British Serious Fraud Office (SFO), which alleges that senior bankers Roger Jenkins, Richard Boath and Tom Kalaris, as well as former CEO John Varley, were all involved in the emergency fundraising by the bank with Qatar.

The Office claims the bankers agreed to pay £322 million in extra fees to Qatar during capital raising that were not properly disclosed to other investors between June and October 2008. The defendants deny the charges.

The prosecutor also pointed out that Boath admitted in an email to one of his colleagues that hadn’t it been for the Qatari money, the bank would have collapsed.

The court is looking into secret deal arrangements made at the time between bank officials and Qatar Investment Authority (QIA).

SFO accuses the four officials of paying illegal funds to Challenger, an investment vehicle of former Qatari prime minister Sheikh Hamad bin Jassim, to facilitate money transfers from Qatar’s treasury.

Prosecutors explained the amount was paid to Challenger under a falsified consulting contract, claiming that the company is providing marketing and operational services to Barclays in the Middle East.

The SFO alleges that the deals paid Qatari companies £322 million, a 3.25 percent commission, in secret fees during capital raisings that were not properly disclosed to other investors.

The Prosecutor indicated that the four bank officials had lied to investors about the amounts paid to Hamad bin Jassim’s Challenger, for advising services.

The Prosecution also reviewed a series of emails, including one dated 30 October 2008 from Varley to Roger Jenkins, Barclays' Middle East investment manager.

In the email, the two discussed that in order to convince Challenger CEO to buy Barclays shares at £1.30 per share, commissions and "profit coupons" of £222 million must be paid. It also details how £12 million were to be paid as fees and £18 million in dividends, and the remaining £192 million must be provided by Jenkins.

In a handwritten paper, Roger Jenkins tried to explain the methods to arrange a £130 million deduction from the entire deal by changing some ratios, prices and commissions.

In addition to a series of emails indicating that Jenkins and Varley were in direct contact with the former prime minister of Qatar between October 2008 and June 2009, where they held meetings in various locations as well as phone calls between Varley and Bin Jassim.

The prosecution referred to the eleventh paragraph of the contract between the parties, which states that there are no commissions or other expenses paid by the bank to investors, other than the declared four percent.