Barclays bosses were put under pressure by Qatari officials to mask the Gulf state prime minister’s holding in the UK bank as it rushed to close a multibillion-pound rescue package that would help the bank avoid a government bailout, a court has heard.
Prosecutors for the Serious Fraud Office presented internal emails and phone calls to a jury at Southwark crown court on Monday, detailing discussions on how the bank might disclose Sheikh Hamad bin Jassim bin Jaber al-Thani’s planned stake in the bank via his British Virgin Islands-based investment vehicle, Challenger.
The court heard Hamad was first involved in fundraising discussions with Barclays through his role as chairman of Qatar Holding, which would end up being a key investor in the bank’s 2008 capital raising.
But in a phone call played to the jury, the bank’s former European financial institutions boss Richard Boath recalls Hamad telling the bank’s executives that “he’d like his family to have some shares in Barclays” as well.
In one email read in court, Boath wrote to colleagues, including the Barclays lawyer Judith Shepherd, detailing a meeting he had with the Qataris’ head of legal, Ahmad al-Sayad.
In that email, Boath said he was told that “HE [His Excellency] wants to have a very low profile” and “would prefer that HE’s BVI-based investment vehicle be our fifth investor and sign its own subscription agreement”.
Boath in turn “reminded him that we would be required to disclose the identity of this vehicle”. Sayad responded that Barclays “should find a way to finesse this in order to keep HE under the radar”.
In a separate email read to the jury on Monday, Boath said Sayad indicated he was “happy” with disclosure of the investment as long as there there “wasn’t evidence” as to “precisely who owned the … vehicle”.
But Shepherd insisted in a call that there was a general obligation for fair disclosure – particularly given the sheik’s head position at Qatar Holding. “We have to tell the truth, not only in circumstances where we think we wouldn’t get found out, we have to tell the truth because that’s what we have to do.”
Boath said in response: “And that’s the problem.”
The SFO alleges that four former Barclays executives – Boath, John Varley, Roger Jenkins and Tom Kalaris – lied to the stock market and other investors about how £322m in fees were paid to Qatar in relation to emergency fundraising of more than £11bn in 2008.
Prosecutors say the executives put together two advisory services agreements in order to disguise Qatar’s demand for larger commission payments. The SFO claims the agreements included sums to be received by Challenger.
All four men have denied the charges. Prosecutors have not accused Qatar, Hamad or his investment vehicle, of wrongdoing.
The trial, which is expected to last up to six months, continues.