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Barclays Investors Urge Rake Appointment

(c) Sky News 2012

Some of Barclays’ biggest shareholders are urging the bank to replace Marcus Agius, its chairman, and install Sir Mike Rake, the heavyweight chair of BT (LSE: BT-A.L - news) , as his successor.

I have learnt that a number of influential investors in Barclays (LSE: BARC.L - news) have told the bank in the wake of this week’s £290m fine for rigging the rate of Libor, the international benchmark interest rate, that Agius should make way for Rake, who is the chairman of BT and easyJet, the budget airline.

To be clear, this is not a universal view among Barclays shareholders, although those who do support the move are among the most prominent institutions in the City.

There is certainly more resistance among shareholders to the idea that Bob Diamond, the chief executive, should go following one of the most turbulent weeks in Barclays’ history.

The belief of the shareholders to whom I’ve spoken is that Rake, a former partner at KPMG, the accountancy firm, would help restore confidence in the bank and that he may also support the idea proposed by these investors for an independent inquiry of some form into what one labelled the "wild west culture" at Barclays.

Agius has had a testy relationship with some Barclays shareholders since the bank bypassed them to raise money from Middle Eastern investors during the financial crisis of 2008.

This afternoon, a Barclays spokesman told me that neither Agius nor Diamond had any intention of resigning over the LIBOR scandal.

That, of course, sounds emphatic, although it’s a bit like the concept of being half-pregnant: public companies cannot issue public statements suggesting that one of their directors is contemplating the idea of quitting.

Agius, who spent the bulk of his career at Lazard, the investment bank, will have been chairman of Barclays for six years next January, and people close to the UK lender tell me that its board was to have reviewed the situation this year even without the latest political firestorm.

Rake would be a logical stand-in chairman, although appointing him would not be without obstacles given the demands on his time from BT, easyJet and McGraw-Hill, the US education and publishing group, where he is a director.

He would almost certainly have to relinquish his other chairmanships in order to replace Agius because of more stringent demands from the Financial Services Authority about the amount of time bank directors must commit to their roles.

Another prospective candidate on the Barclays board to step into the chairmanship on an interim basis could be Alison Carnwath, a former banker. Her copybook has been blotted by the revolts over boardroom pay at both Barclays and Man Group (LSE: EMG.L - news) , the hedge fund, because she chairs the remuneration committees of both companies.

The criticism of her in relation to Barclays is slightly unfair, however, because it has emerged since the bank’s annual meeting that she opposed the idea of Diamond taking his annual bonus for 2011 before being overruled.

Both Agius and Diamond have been summoned to appear before the Treasury Select Committee next week.

The committee chairman, Andrew Tyrie, said the affair was “the most damaging scam I can recall. The reputation of Britain's financial services industry has been severely tarnished, albeit unfairly for the overwhelming majority unconnected with the scam. The public's trust in banks has been even further eroded. Restoring the reputational damage must begin immediately.”

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