(Note language that may offend some readers in line 57)
By Kirstin Ridley
LONDON, Oct 9 (Reuters) - Former Barclays finance
director Chris Lucas would have been criminally charged over two
emergency fundraisings launched by the bank at the height of the
financial crisis if he were not too ill to stand trial, a London
fraud trial heard on Wednesday.
As a former bank director, Lucas, who stepped down in 2013
due to his health, arguably took direct responsibility for false
representations in the bank's public documents about capital
raisings in June and October 2008, a prosecutor for the UK
Serious Fraud Office (SFO) alleged.
The high-profile trial revolves around undisclosed payments
to Qatar as Barclays raised more than 11 billion pounds from the
Gulf state and other investors to avert a state bailout as
markets roiled in the global credit crisis.
Prosecutor Edward Brown highlighted the alleged role played
by Lucas on the second day of the fraud trial of three former
top Barclays executives; Roger Jenkins, Tom Kalaris and Richard
Boath, at London's Old Bailey criminal court.
"The prosecution say ... that Chris Lucas may be regarded as
directly making a false representation in the Barclays documents
(as a director)," Brown said, as the prosecution laid out its
case.
"He (Lucas) is not a defendant, before the court, due to
illness...But for his illness he would have been charged."
Lucas' lawyer declined to comment.
The defendants are charged with conspiring with Lucas to
commit fraud by false representation as well as a separate
charge of fraud by false representation. They deny wrongdoing.
The trial is expected to last five months. The defence will
later present its case.
Barclays paid Qatar 322 million pounds in fees that were not
disclosed in public documents, such as the prospectuses and
subscription agreements that outlined payments and commissions
paid to investors as incentives for their support.
The prosecution alleges that the defendants breached
well-established banking practice, under which all investors
should be paid equally, and disguised these fees as "bogus"
advisory services agreements (ASAs).
Brown said Barclays' lawyers wanted evidence of services to
justify the fees the bank was paying Qatar -- and he alleged the
defendants and Lucas had made "after the event" attempts to
demonstrate some services had been provided.
But he added: "These did not come close to justifying the
huge amounts paid over to the Qataris and, you may well
conclude, were nothing more than a smoke-screen to seek to
legitimise what had gone before."
Qatar Holding, part of the Qatar Investment Authority
sovereign wealth fund, and Challenger, an investment vehicle of
former Qatari prime minister Sheikh Hamad bin Jassim bin Jabr
al-Thani, invested about 4 billion pounds in Barclays over 2008.
But that June, the Qataris demanded more than double what
the bank had agreed to pay other investors and the defendants,
knowing Barclays needed to strengthen its balance sheet in
volatile markets, wrestled with how to pay them, Brown said.
Boath laid bare the pressure the bank was under.
"If he (Sheikh Hamad) doesn't come through with his money,
we're fucked," Boath was quoted as saying on June 11, 2008,
according to Brown.
Jenkins, the former chairman of the bank's Middle East
investment banking arm, Kalaris, who led the bank's wealth
division and Boath, a former European head of corporate finance,
are charged with fraud and conspiracy to commit fraud by false
representation over the first fundraising in June 2008.
Jenkins also faces both charges over the second fundraising
that October.
($1 = 0.8181 pounds)
(Reporting by Kirstin Ridley
Editing by Alexandra Hudson)
Barclays (BARC)
