Barclays Approved $32 Million Qatar Bonus for Jenkins, SFO Says

(Bloomberg) -- Former Barclays Plc executive Roger Jenkins negotiated a 25 million pound ($32 million) bonus for securing billions of dollars from Qatar at the height of the 2008 financial crisis, averting a U.K. bailout, a prosecutor said during his fraud trial.

Jenkins led discussions with then-Prime Minister Sheikh Hamad Jassim al Thani, which resulted in an investment totaling from the gulf state’s sovereign-wealth fund and Sheikh Hamad, lawyers from the U.K. Serious Fraud Office said. The agency is prosecuting Jenkins and two other ex-Barclays executives for having allegedly hidden 322 million pounds in fees the bank paid the Qataris as a sweetener for the deal.

Qatar’s investments came as part of two Barclays cash calls in June and October 2008, which raised more than 11 billion from all investors. When the second capital raising was approved by existing shareholders, Jenkins emailed colleague Rich Ricci arguing that then-Chief Executive Officer John Varley and investment banking head Bob Diamond should give him a special bonus, according to evidence shown to a jury in London Wednesday.

“This capital did the trick,” Jenkins, the former Middle East head of investment banking, said in an email shown to the jury by prosecutor Ed Brown. “Why can’t varley, diamond” go to the compensation committee “and say we need to make a special payment for this endeavor now.”

In March 2009, Barclays offered to pay Jenkins 25 million pounds in a “special award,” Brown said, citing a draft agreement for the payment. Varley, Diamond and Ricci are not accused of wrongdoing at the trial.

The details emerged in the second week of a historic fraud trial, where the SFO is attempting to hold senior bankers accountable for alleged wrongdoing during the financial crisis. Jenkins and the two other co-defendants Tom Kalaris and Richard Boath, have all pleaded not guilty.

Barclays paid the 322 million pounds via two agreements in which Qatar ostensibly committed to delivering services to the bank. The SFO claims those agreements were nothing more than a smokescreen designed to conceal the payments from other investors who weren’t getting the same deal.

On Wednesday, Brown focused on the fact that the bank’s agreement to pay Qatar for advisory services in October 2008 came only 16 weeks after a similar arrangement that largely covered the same period. Barclays agreed to pay Qatar 280 million pounds for the services, which the bank had valued at $39 million only days earlier, Brown told the jury.

“Having announced publicly that it was not going to take government money, it was imperative for Barclays to ensure the Qatari investment in late October 2008,” Brown said. “Failure to do so at that time would have had very serious consequences for the bank.”

Jenkins and Kalaris didn’t answer questions when the SFO interviewed them in 2014 and 2016, Brown said, but both delivered written statements. In his statement, Jenkins said he didn’t lead the capital raisings or advisory agreements and wasn’t responsible for the decisions. The arrangements were approved by senior managers, including Varley, compliance and company lawyers, Brown cited him as saying.

Kalaris largely echoed those comments, underlining what he described as his limited role in the process, according to Brown.

In contrast, Boath sat for eight days of SFO interviews between 2014 and 2016. Boath said that the June advisory agreement was set up to pay Qatar the extra fees it was demanding, but that lawyers had told him that the mechanism was legal as long as the Qataris genuinely delivered the services, Brown quoted him as saying.

To contact the reporter on this story: Franz Wild in London at fwild@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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