Barclays's Agius Says He Doesn't Recall If He Got Qatar Fee Info
(Bloomberg) -- Former Barclays Plc Chairman Marcus Agius said he didn’t recall if he was told the bank was paying higher fees to Qatar than other backers in the 11.2 billion-pound ($14.6 billion) fund raisings during the 2008 financial crisis but that such an arrangement would have been wrong.
"Paying commission to one set of underwriters and not others would’ve been unacceptable to the market," Agius told a London jury on Tuesday.
The former chairman was the first witness to testify in the trial of then-Barclays Chief Executive Officer John Varley and three other former executives who helped the lender avoid a government bailout by the investments, including 4 billion pounds from Qatar. "I would have wanted to understand why it would’ve been necessary," he said, adding that he would’ve either blocked it or ensured all investors got the same amount.
The U.K. Serious Fraud Office alleges that the bankers agreed to pay 322 million pounds in extra fees to the gas-rich Gulf nation in a pair of share sales in June and October 2008. The defendants deny the charges. Agius isn’t accused of wrongdoing.
The trial of Varley, former Middle East head Roger Jenkins, ex-wealth boss Tom Kalaris, and Richard Boath, another senior official, is the first jury trial of senior bankers related to the financial crisis. Agius became chairman in January 2007 and left in October 2012.
Barclays agreed to pay Qatar more than double the standard 1.5 percent investment commission and concealed this from other investors by making the payments through what prosecutors say were bogus Advisory Services Agreements, or ASAs. The defense claims the ASAs were genuine.
Agius said that while he and the board approved of the ASAs, because they would have helped develop a strategic relationship with a wealthy partner, he couldn’t say whether he had been made aware of the fees Qatar would receive.
"I cannot recall if at the time, we discussed the fees," Agius said. "I think I would’ve taken it that if the fees had been so notable they would’ve been brought to my attention."
Agius told the jury that he had an excellent relationship with Varley, who kept him abreast of efforts led by Jenkins to secure the investments from Qatar, known within Barclays by its code name "Quail." According to a June 5, 2008 email shown to the court, Varley told Agius that "Quail is bagged" for 2 billion pounds.
"Excellent news and thank you for telling me so promptly," Agius responded. "I now have a mental image of Roger J as a pointer!"
Much of Agius’s evidence centered on how much of the events from the period he recalled, more than a decade later. When Judge Robert Jay asked him whether he remembered anyone telling him that the Qataris had laughed at Barclays officials offering them 120 million pounds in fees, Agius responded: "No, too long ago."
Agius said the mounting market uncertainty was so severe that some non-executive directors wanted to resign their positions rather than deal with the "unsettling" turmoil. Varley, whom Agius described as a man of "utmost integrity," led the plan to save the bank.
Agius also commented on the maneuvering required to avoid a government bailout. "We had to protect ourselves against Barclays seeking to be too clever," Agius said. "Raising money was complex and complicated thing to do. It requires a high degree of dexterity. It could be that we were being too clever by half. That was one of my concerns."
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