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Ex-Barclays exec said 'none of us wants to go to jail' over Qatar deal, jury hears: 'The food sucks and the sex is worse'

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
In the dock: Former global co-head of Barclays Finance Richard Boath arrives at Southwark Crown Court on January 14, 2019 in London, England. Photo: Jack Taylor/Getty Images

Two former Barclays executives discussed the possibility of going to jail over a crucial funding deal with Qatar in 2008, a jury heard on Thursday.

The Serious Fraud Office (SFO) presented transcripts of calls and emails from former senior Barclays bankers as part of the second day of its prosecution of four ex-Barclays executives, including ex-CEO John Varley.

They all stand accused of conspiracy to commit fraud by false representation. The SFO alleges that the executives misled investors by hiding the true amount paid to Qatar for a multibillion pound investment at the height of the financial crisis.

The defendants in the case are: Varley, who was CEO of Barclays between 2004 and 2011, Roger Jenkins, who formerly ran Barclays Capital’s investment management business in the Middle East and North Africa, Thomas Kalaris, the former CEO of Barclays’ Wealth Management, and Richard Boath, the former head of European financial institutions group at Barclays Capital. 

Varley and Jenkins face two counts and Kalaris and Boath face one. All four defendants have pleaded not guilty. Qatar is not accused of any wrongdoing.

‘None of us want to go to jail here’

On trial: Former chief executive of Barclays John Varley leaves Southwark Crown Court on January 14, 2019 in London, England. Photo: Jack Taylor/Getty Images

On Thursday, the court heard a recording of a call between Kalaris and Boath in June 2008. On the call, the pair allegedly discussed getting Barclays’ chief lawyer at the time to sign off on documents that were to be sent to investors in the 2008 fundraising. The documents did not disclose the sums paid in the advisory deals with Qatar and the pair agreed that legal sign-off was essential.

“None of us wants to go to jail here,” Kalaris said.

“It ain’t worth it and apparently the food sucks, so, right,” Boath replied. “You know, that’s the purpose of the call.”

“Yeah. No, the food sucks and the sex is worse, so,” Kalaris said.

READ MORE: Senior Barclays banker raised concerns about ‘hidden commission’ in Qatar deal, court told

Earlier in the day the jury had been presented with a transcript of a call between Boath and Kalaris where they discussed doing a “a side deal” with the Qataris.

“They all knew that publicly all the investors had to be seen to be paid the same,” Brown told the jury. “And it came about therefore that it was the conspirators, say the Crown, who devised the mechanism to hide, disguise, the true commission rate to be paid to the Qataris.”

In another recorded call played to the jury, Boath said: “Frankly we all know that whatever we enter into we are entering into in exchange for the subscription agreement.”

The jury also heard how a member of Barclays’ Corporate Development division raised concerns internally about the dealings with the Qataris.

READ MORE: Former Barclays execs lied about payments to Qatar, court told

The SFO alleges that the four accused mislead investors by not disclosing the true nature of fees paid to Qatar in return for their £4.4bn of investment in Barclays at the height of the financial crisis. It claims the four former Barclays executives engineered advisory deals with Qatar as “smokescreens” for payments. There is no suggestion of any wrongdoing by Qatar.

“The conspirators agreed to use the ASA [Advisory Service Agreements] as the dishonest mechanism to get around the problem of how to pay the Qataris a greater fee than the other investors,” Ed Brown QC, the lead lawyer for the SFO, said on Thursday.

Qatar received fees totalling more than double in percentage terms what other investors received at the time, the SFO alleges.

‘If he doesn’t come through with his money, we’re f*****’

Defendant: Former Barclays head of investment banking and investment management in the Middle East, Roger Jenkins arrives at Southwark Crown Court on January 14, 2019 in London, England. Photo: Jack Taylor/Getty ImagesUSD

Brown sought to show the importance of the Qatari’s involvement in the fundraising, which helped Barclays avoid a bailout from the UK government.

The jury was presented with a transcript of a call in which Boath said: “What he doesn’t know, or what he doesn’t realise is like if he doesn’t come through with his money, we’re f*****.” The “he” was understood to refer to a representative of the Qataris.

In a separate transcript, Boath said “Without 1bn, at the very least, from Q[sic] we are basically dead.”

A transcript of a call between Robert Morrice, the chief executive officer of Barclays Asia, and Boath discussing negotiations with the Qataris was also read to the jury. In it, Morrice said: “They’ve got us by the balls because the price is so low, that’s the problem.” Morrice is not accused of any wrongdoing.

READ MORE: The trial of the ‘Barclays Four’ starts this week — here’s what you need to know

When the deal was agreed, the then Barclays CEO, Varley, said in an email to then chairman Marcus Agius: “These people are the new cocks of the roost,” the jury heard.

The case is ongoing and expected to last up to six months.