Ex-Barclays director says controversial deal with Qatar helped it win work in the Middle East
A former Barclays executive told a court today that the bank’s two controversial £322m services agreements with Qatar at the time of its £12bn financial crisis fundraisings subsequently helped it win work in the Middle East.
Former Barclays director Glenn Leighton said projects he had worked on in Bahrain and Kuwait were landed with the help of Qatar following two £322m so-called advisory service agreements (ASAs) between the bank and the gas-rich state in 2008.
The Serious Fraud Office (SFO) has accused former chief executive John Varley and former senior bankers Richard Boath, Tom Kalaris and Roger Jenkins of using the services agreements to hide extra fees it was paying to Qatar in return for its close to £4bn investment in the bank.
The four have denied wrongdoing.
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Leighton, who reported to Boath, said he worked on projects in Bahrain and Kuwait for companies that Qatar held a shareholding in.
He said Barclays’ services deal with Qatar helped it win roles on the deals.
“Part of our success in winning these transactions came from the fact that we had our own shareholder [Qatar] pushing for Barclays to be involved,” he said.
The court was shown a spreadsheet Leighton had made related to the June fundraising which modelled the payment to Qatar of a fee that blended the basic 1.5 per cent of its total investment in the bank that all investors received, with an extra payment to be agreed as part of the ASA.
Despite this, he maintained that his view at the time was that they were two separate, if interconnected deals.
“It wasn’t the case that Barclays under the share subscription agreement paid the Qataris 3.75 per cent, they were completely separate agreements,” he said.
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Under cross-examination by Boath’s barrister William Boyce QC, Leighton said he viewed the advisory agreement with Qatar in the same way as he viewed separate memorandums of understanding struck with Japanese and Chinese investors at the time of the June 2008 fundraising.
He said the extra deals with Qatar, Japan and China were separate from the fundraising, but were negotiated “in tandem”.
“The Japanese, Chinese, Qataris all wanted extras and the extras were dealt with in different ways without it affecting the level playing field for everyone else,” he said.
Leighton said that at an investor session at the launch of the June fundraising, Barclays' then head of investment banking Bob Diamond had announced the services deal with Qatar, saying: “We have signed a very significant agreement with the Qataris to sort out our entire strategy in the Middle East.”
It was the “first thing he said when he was given the microphone,” Leighton said, “it was that significant.”
The trial continues