Ex-Barclays bosses hid Qatari millions from market, SFO says

[LONDON] Three senior ex-Barclays Plc executives kept other investors in the dark about millions of pounds in fees the bank was paying Qatar during the struggle to save the lender at the height of the 2008 financial crisis, a prosecutor told a London jury on the opening day of an historic fraud trial.

The men were working over the summer of 2008 to secure billions of dollars from Qatar's sovereign-wealth fund, which would allow Barclays to avoid nationalisation when the chaos of the financial crisis destroyed its balance sheet, Ed Brown, the lead prosecutor for the Serious Fraud Office, said Tuesday.

Former Middle Eastern investment banking chief Roger Jenkins, ex-wealth boss Tom Kalaris and Richard Boath, who headed up Barclays's financial institutions group in the region, face charges for defrauding investors by not disclosing the £322 million (S$543.6 million) in fees Barclays paid the Qataris. The fees, the SFO argues, were paid under a "pretend" agreement that purported Qatar was delivering advisory services.

"These agreements were an invention, used as a means to hide the additional fees that were in truth being paid to the Qataris for investing," Mr Brown said during a opening argument that's expected to last the rest of the week. "The Qatari investment had to be achieved and this meant telling lies.Telling lies in this way, say the prosecution, is a criminal offence, committing fraud by false representation."

The trial is the most high-profile case targeting top bankers for events taking place during the financial crisis. It is also the most significant case ever brought by the SFO. The three men pleaded not guilty on Monday, and their attorneys will start to present their opening arguments next week.

Former Barclays Finance Director Chris Lucas was part of the conspiracy, but is too ill to stand trial, Mr Brown said.

BLOOMBERG