Barclays Prosecutor Missed Steps in Varley Probe, Judge Says
(Bloomberg) -- The judge overseeing the trial of former Barclays Plc Chief Executive Officer John Varley and other bank officials said the U.K. Serious Fraud Office missed steps while investigating the landmark fraud case.
Judge Robert Jay said that the SFO hadn’t done enough to obtain documents from Qatar’s London lawyers when it was investigating whether fees Barclays paid to the Gulf nation in 2008 were a dishonestly concealed inducement for an investment into the struggling bank. While the documents are covered by attorney-client privilege, the SFO could have applied to a court to gain access, Jay said.
“The SFO has not taken all reasonable and appropriate steps which were open to the SFO in this case in relating to obtaining the production to it of such documents by Latham & Watkins," prosecutor Philip Stott said in a London court, reading out a ruling Jay made in January, but withheld from the jury until Thursday.
Minutes earlier, Stott told the jury that "at no stage did the SFO investigate as suspects Qatar Holdings LLC, the Qatar Investment Authority, or any other relevant Qatari official, including Sheikh Hamad, Dr. Hussain or Ahmad Al-Sayed."
The SFO case against Varley and the three other former executives revolves around whether they lied to investors about fees paid to Qatar in 2008 so that the gas rich nation would invest 4 billion pounds ($5.3 billion) and save it from nationalization. The defendants deny the allegations.
Qatar Holdings and the QIA are the sovereign-wealth fund entities Barclays dealt with, while then-Prime Minister Sheikh Hamad bin Jassim Al Thani and the other two Qatari officials were in charge of making investment decisions.
The SFO alleges that two advisory agreements between Barclays and Qatar were dishonest because the bank never intended to obtain any services as described in the deals. The agency claims they were only set up in order to channel 322 million pounds in fees to Qatar.
Jay on Thursday asked the SFO’s lead investigator David Webb whether anyone at the agency had queried Richard Boath, the only defendant to answer questions during the probe, about whether he had been told by other officials at Barclays that they never intended to get any value from the advisory agreements. Webb responded that he didn’t know.
When asked about the length of the five-year investigation, Webb said that Barclays had delayed the SFO by up to two years by refusing to hand over documents containing the legal advice around the advisory agreements that the executives received at the time.
"A significant part of that time is accounted for by a delay caused by Barclays not handing over that material," Webb said. "It was absolutely fundamental that we could obtain those documents which contained the legal advice."
Jay dismissed the jury for the rest of the month so he could hear legal arguments in the case.
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