Former Barclays Executive Tells Jury That He Isn’t ‘That Clever’

(Bloomberg) --

Former Barclays Plc executive Roger Jenkins told a London jury at his fraud trial that he and his colleagues wrestled with how an arrangement to pay Qatar fees for a 2008 deal would look to outsiders before adding that he was “not that clever.”

Answering questions from Ed Brown, a prosecutor for the Serious Fraud Office, Jenkins said that the fees Barclays paid Qatar as part of the Gulf state’s 4 billion pound ($5.3 billion) investment in the bank were legitimate, but that it was also a question of making sure it appeared that way.

Barclays agreed to pay Qatar more than the standard 1.5% investment fee it was offering other investors and settled on doing so through a so-called advisory services agreement. Barclays paid Qatar 322 million pounds under two ASAs, with the nation helping the bank expand its business in the region in return. The SFO alleges that those deals were fakes and only designed to make the payments look legitimate.

Jenkins and two former colleagues deny charges that they concealed the extra fees from other investors.

On Monday, Jenkins said it took him and his colleagues a while to reassure themselves that an ASA was the best route to go.

No Illusion

“I don’t think anyone in this case is under any illusion that what we’re dealing with here is a fine line,” Jenkins said. “This isn’t clear cut, you need to really think about this.” He added that it wasn’t a question about whether the deal was genuine, but simply about its “optics.”

Jenkins said the value Barclays was able to derive from a relationship with Qatar was beyond a doubt, given that the wealth it was generating from gas sales was growing rapidly and coming up with different banking services and co-investments was easy.

“I jumped on this opportunity,” Jenkins said. “Who wouldn’t want this opportunity? I had no reason to doubt that the money you could make from Qatar was very, very, very substantial.”

It was the beginning of Brown’s cross-examination of Jenkins, one of the most senior bankers ever to go on trial in the U.K. Brown asked why it had taken a while for the Barclays bankers to come up with the ASA as a solution, when it sought to deepen its relationship with Qatar anyway.

“If the advisory agreement in this context had been honest and such a good advantage to yourself and Barclays, you would have landed on it straight away,” Brown said. “If it was honest. Why didn’t it occur to you?”

‘Extremely Sharp’

When Jenkins said it might be because he’s “clearly not that clever,” Brown replied that the jury might disagree with him, given that he is “extremely sharp.”

“I’m a very experienced banker, I have a moral compass,” Jenkins said. “I didn’t think of an advisory services agreement. Nor did anyone else interestingly enough. It only worked particularly in the context we had with the Qataris where I could see it would cost them not a cent to do it.”

As Brown sought to show that Jenkins had something to hide, he pointed to an email Jenkins had written to co-defendant Tom Kalaris in which he suggested discussing the advisory deal rather than emailing about it.

“Was it a question of keeping off the record what you’d like to say to Mr. Kalaris about fees being hard to sort?” Brown asked.

Jenkins said he preferred speaking, because he didn’t have the patience to log onto his laptop and it was slow typing up a complicated matter on his BlackBerry.

“Mr. Brown, you know what I’m going to say to that, I don’t want to keep things off the record,” Jenkins said. “I am moving around and it’s better to go through this difficult thing -- which is the side deal -- on the telephone rather than setting it out in email.”

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

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser

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