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Barclays bosses feared pay was at risk if bank was bailed out, court hears

barclays-building-2012-700x450.jpgFormer leading bankers at Barclays faced questions in court yesterday over how concerns about their own pay packets may have affected their decisions during the financial crisis.

The Times reports that Southwark Crown Court heard allegations that Roger Jenkins, the bank’s ex-Middle East chairman, worried late at night about how a government bailout package would affect his remuneration.

Unlike peers like Royal Bank of Scotland and Lloyds, Barclays was able to raise sufficient funds from investors to avoid a government bailout.

Three other ex-Barclays bankers – former chief executive John Varley, former wealth division chief executive Tom Kalaris, and former European division head Richard Boath – are also on trial over conspiracy to commit fraud charges.

The charges relate to accusations they hid more than £300m in commissions paid to investors from Qatar in exchange for rescue funds from the Gulf state amounting to around £4bn when the crisis hit ten years ago.

The Times reports the jury heard that Jenkins was recorded in a phone call to colleagues saying: “At 2 o’clock in the morning I was panicking that we were about to get nationalised and you guys must have been the same because the government…wouldn’t look kindly on compensation over a million dollars.”

Prosecution QC Edward Brown added that, as Barclays sought to avoid a government takeover, the quartet would have been “highly motivated to keep their jobs”, and their concerns over the government potentially limiting dividends, senior pay or management control were borne out in board meeting minutes.

The Barclays staff deny the charges, and there have not been any allegations of wrongdoing against Qataris.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Firstly depending on what reporting you read is dependant of the amount of money raised. Above it states £4bn another article I read states £11bn.

    From a shareholder prospective was it in the better interests of the bank to pay £300m for £4bn or take a government hand out ?

    Secondly how was the £300m concealed afterall we are not talking about raiding the petty cash tin here

    Where were the banks advisers, I can’t believe for one minute, as in the cash of the ‘Rover Four’ each and every step was carefully vetted by the very best lawyers and financial advisers so as not to leave the Director’s exposed.

    I hardly think that this type of case should be heard in front of a lay jury as I believe to be the case as they won’t have a clue about the intricacies of the technical arguments and counter arguments.

    I predict the case will collapse

  2. You failed to mention the obscene amounts of their bonuses. Did the possible loss affect their judgement ? What do you think, we’re talking about the greed that drives the City of London.

  3. Whilst the motives of the management team at Barclays during the financial crisis may be rightly and fairly viewed in a dim light – the outcome was a better deal for shareholders compared to a Government bail out, and I think a better deal for tax payers. That the senior management team did it for the wrong reasons is perhaps distasteful – and might mean you do not want them to dinner, but given the scale of the other bail outs, their shenanigans probably saved a couple of hundred quid for every single taxpayer in the UK.

    Whilst I’ve no view on whether they SFO will get their scalps – I’m not sure there is a strong public interest case here.

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