A former Barclays executive told a jury he developed a “close” relationship with Qatar’s prime minister in 2008, just months before the lender and Gulf state struck a controversial services deal that is now at the centre of a criminal trial.
The details were laid out by defendant Roger Jenkins, Barclays’ former investment banking chief, who is on trial in London on fraud charges and who gave evidence for the first time on Monday as part of the only UK criminal case brought against bankers for their actions during the financial crisis.
The Serious Fraud Office (SFO) has accused Jenkins and two former Barclays executives of devising fraudulent advisory services agreements in order to disguise payments worth £322m to Qatar. It alleges that the money was actually a fee demanded by Qatar in exchange for investing £4bn in the bank as part of an £11bn emergency fundraising drive at the height of the financial crisis.
The fees effectively meant Qatar was able to purchase Barclays shares at a heavily discounted price.
Jenkins told the jury on Monday that he first met Qatar’s leader at a dinner in Sardinia in July 2007, to which he had been invited by his wife’s friend.
He said he struck up a conversation with Sheikh Hamad bin Jassim bin Jaber al-Thani about Qatar’s stake in Sainsbury’s, which had recently increased to 25%, and the pair later made plans to meet abroad.
In the months that followed, the court heard that Sheikh Hamad invited Jenkins to the south of France, Qatar’s capital Doha, and then met with the banking boss in Los Angeles over the Christmas holidays.
Jenkins’ lawyer, John Kelsey-Fry QC, asked whether Barclays colleagues were right to characterise the relationship with Sheik Hamad as “extremely close”.
“We were close. We spoke frequently. We could pass time [speaking] … socially or on business,” Jenkins said.
Jenkins said Sheikh Hamad had also expressed interest the banking sector, which was starting to suffer during the 2008 global credit crunch.
“We were talking about taking advantage of falling share prices of banks, generally,” Jenkins said.
By February 2008, Jenkins said he was aware that Barclays was going to need emergency cash of its own and was asked by the bank’s former finance director Christopher Lucas whether Qatar would be interested in taking part.
Jenkins said that there were “extensive discussions” with the Qataris ahead of the first funding round in June 2008.
Jenkins and his two former colleagues – Thomas Kalaris the former head of Barclays wealth division and Richard Boath, a former head of Barclays’ European financial institutions – face charges of fraud as well as conspiracy to commit fraud. All three deny the charges.
The SFO’s case followed a five-year investigation into the details of the rescue package. The fraud charges carry a maximum 10-year prison sentence.
A previous trial involving all three executives came to a close in April, when the jury was discharged following four months of court proceedings. The former Barclays chief executive John Varley was a co-defendant in that trial, but he was acquitted by an appeals court in June.
The trial continues.