Four former high-ranking bank officials at Barclays have been accused of hiding 322 million pounds ($420 million) in payments to Qatar in exchange for investing in the bank and cash infusions in 2008, according to a report from Reuters.
In a high-profile criminal trial in London, former Chief Executive John Varley and three of the bank’s former directors – Roger Jenkins, Tom Kalaris and Richard Boath – are all facing charges related to the incident.
All four were charged with conspiracy to commit fraud by false representation. Varley and Jenkins each are accused of two counts and Kalaris and Boath each face one. They have all denied the charges against them.
Edward Brown, senior lawyer for the Serious Fraud Office, is prosecuting the case. He alleges that Barclay’s Advisory Service Agreements (ASAs), in which the bank hid extra fees from investors and the market as a whole, were a “dishonest mechanism.”
Barclays felt compelled to secure a deal in 2008 while the market roiled around it, prosecutors allege, but the country wanted a fee of as much as 3.75 percent before acquiescing to 3.25 percent in return for investing in the bank.
That fee, prosecutors said, is more than double what Barclays paid other investors. Because the bank didn’t want others asking for the same percentage, the accused executives falsely represented the market and hid the fee amount.
“It is the hiding of these additional commission fees which lies at the heart of this case …” Brown said to the jury. “(The ASAs) were devised by the conspirators as [a] mechanism for paying the Qataris greater fees than those paid to other investors so as not to reveal the true position …”
The defendants claim that lawyers approved the use of the ASAs and signed off on them, Brown said, but the lawyers didn’t know the true nature of the ASAs.
“The truth is that the lawyers did not approve of the use of the ASAs as mechanisms to hide the commission fees paid to the Qataris,” Brown said.
The trial is expected to last up to six months.