* All three former bank executives cleared
* A blow for under-fire Serious Fraud Office
* Case hinged on payments to Qatar in 2008 fundraising
(Adds SFO reaction, further details, quote from lawyer)
By Kirstin Ridley
LONDON, Feb 28 (Reuters) - Three former Barclays
executives were acquitted in London on Friday of charges they
helped funnel 322 million pounds ($418 million) in secret fees
to Qatar in return for rescue financing during the credit
crisis.
In a blow to the Serious Fraud Office (SFO), a jury cleared
Roger Jenkins, Tom Kalaris, and Richard Boath of fraud.
The men, aged between 61 and 64, all denied any wrongdoing.
Qatar, a major investor in Britain and still a significant
Barclays shareholder, was neither investigated nor accused of
wrongdoing.
The verdict draws a line under an ambitious,
seven-and-a-half year investigation that led to the first
criminal charges in Britain against senior financiers at a major
bank over credit crisis-era conduct.
It also marks the likely end of efforts by prosecutors to
hold top bankers to account for decisions taken when the global
financial system was brought to its knees, forcing taxpayers
into bank bailouts totalling hundreds of billions of pounds.
The taxpayer-funded SFO filed the charges one month after
the ruling Conservative Party pledged to abolish the
investigator and prosecutor and roll it into a national
crime-fighting force in 2017.
"Our prosecution decisions are always based on the evidence
that is available, and we are determined to bring perpetrators
of serious financial crime to justice. Wherever our evidential
and public interest tests are met, we will always endeavour to
bring this before a court," the SFO said after the verdict.
The SFO's prosecution has been beset by setbacks. The most
senior defendant, former CEO John Varley, was acquitted last
June and its case against Barclays itself, which also centred on
alleged unlawful financial assistance to Qatar through a $3
billion loan in 2008, was dismissed in 2018.
"The SFO’s failure to secure any convictions in this
important and high profile case raises serious questions about
the agency's treatment of individuals in these matters," said
Ross Dixon, a partner at Hickman & Rose solicitors, who was not
involved in the trial.
SECRET PAYMENTS
The case turned on two undisclosed payments made by Barclays
to gas and oil-rich Qatar during a two-part, 11 billion pound
emergency fundraising in June and October 2008 that allowed the
bank to avert a state bailout.
Prosecutors had alleged Middle East investment bank head
Jenkins, Kalaris, who ran Barclays' wealth unit, and former
financial institutions head Boath conspired with former finance
director Chris Lucas to disguise a 42 million pound payment to
Qatar.
The SFO said the bankers used an advisory services agreement
(ASA) to mask the fact Barclays was paying Qatar more than twice
the fees it was paying other investors that June.
Jenkins, described as the "gatekeeper" to the Qatari
relationship, was also charged over the bank's 280 million
pound, five-year ASA struck with Qatar four months later.
The men said the ASAs were intended as genuine mechanisms to
pay Qatar what it wanted while extracting lucrative, commercial
business from Qatar, that such side deals were common in
banking, that senior directors had authorised the parameters of
negotiations and, along with lawyers, had approved the deals.
A lawyer for Lucas, who was not charged because he was too
ill to stand trial, has declined to comment.
NERVOUS NELLIE
Much of the prosecution case was built from recorded
conversations on the telephone line of Boath, nicknamed "Nervous
Nellie" by his counsel.
Boath fretted the June ASA looked "dodgy", that it could be
seen as a "bung" and said he felt sick at the thought of having
to demonstrate to authorities that Qatar had provided services,
transcripts of conversations and SFO interviews showed.
Defence lawyers said Boath had not fully grasped that Sheikh
Hamad -- the former CEO of the Qatari sovereign wealth fund --
could provide Barclays with lucrative, commercial business
opportunities by simply opening his rolodex.
Jenkins told the jury that Sheikh Hamad would have been
insulted if he had been asked to spell out his promises, but
that he had believed "with a passion" in the ASAs.
After a heart attack in early August 2008, Jenkins said he
was ordered back to work a month later to help save Barclays as
markets roiled in the crisis. He left the bank in 2009.
($1 = 0.7696 pounds)
(Reporting by Kirstin Ridley; Additional reporting by Lawrence
White; Editing by Alexander Smith)
Barclays (BARC)