Three former Barclays executives were acquitted in London on Friday over claims they funnelled £322 million pounds in secret payments to Qatar in return for £4 billion of rescue funding during the 2008 international banking crisis.
A jury cleared Roger Jenkins, 64, Tom Kalaris, 64, and Richard Boath, 61, of fraud after a complex £10 million, eight-year investigation into the circumstances of a series of payments to Qatar.
Qatar, a major investor in Britain and still a significant Barclays shareholder, was not investigated nor accused of wrongdoing. It did not cooperate with investigators working on the probe.
The acquittals are a serious blow to the prosecutors seeking to hold executives to account over their roles during the financial crisis that forced taxpayers to spend hundreds of billions of pounds into bailing out banks.
The Serious Fraud Office (SFO), which brought the case, had been threatened with break-up by former premier Theresa May after a series of high-profile failed prosecutions.
The SFO launched its inquiry in 2012 into Barclays and its capital raising arrangements with Qatar’s sovereign wealth fund and an investment vehicle controlled by then premier Sheikh Hamad bin Jabar Al Thani.
The trio were the most senior bankers to be prosecuted over events in 2008 despite major criticisms of senior executives across the sector during the crisis.
The inquiry has, however, been dogged by delays and setbacks.
Charges of fraud and unlawful financial assistance against the bank itself were dropped on the orders of a judge in May 2018 over a $3 billion loan to the Qataris that prosecutors claimed had been illegally used to buy Barclays stock.
The SFO appealed to reinstate the charges but the High Court ruled against them.
And a charge of fraud levelled against former chief executive John Varley was also dropped last year, leaving the three high-level executives as the only people to face charges over the case. All three had insisted they did nothing wrong.
After the acquittals, an SFO spokesperson said: “Our prosecution decisions are always based on the evidence that is available, and we are determined to bring perpetrators of serious financial crime to justice.
"Wherever our evidential and public interest tests are met, we will always endeavour to bring this before a court.”
The case was connected to two payments of £42 million and £280 million to Qatar during an operation to raise £11 billion to keep the bank in private hands.
Mr Jenkins, the head of Middle East banking, struck up a relationship with Sheikh Hamad in 2007 and was seen as the gatekeeper for relations between the bank and the sovereign wealth fund.
In the face of the mounting financial crisis, Qatar took a tough negotiating stance and demanded commission payments greater than those paid to other institutional investors.
Prosecutors claimed that the three bank executives were involved in ensuring Qatar got the money they wanted through "sham" advisory agreements that did not expose them to further demands from other investors. They were said to have worked with the bank’s finance director Chris Lucas who did not stand trial because of illness.
Mr Jenkins said he had "lived under a cloud" since the investigation began. "This has taken an enormous toll on me both economically and personally, and I look forward now to rebuilding my life," he said in a statement.
In a statement, Sheikh Hamad said that claims at the trial that two advisory agreements were bogus had been shown “to be untrue”.
He said the Qatari investors “are of course pleased that this has happened and that the true position has now been made entirely clear".
The statement added: “The Qatari parties at all times took their legal obligations extremely seriously, obtaining advice from major law firms with international reputation and experience, and acting on advice as to all applicable regulatory and other requirements.”
The prosecution had claimed that the men were motivated to act to prevent the loss of multi-million pound bonuses if the bank was bailed out by the government.
The acquittals mark the end of the criminal cases against former Barclays bankers but the lender itself faces another trial in London after financier Amanda Staveley brought a £1.6 billion legal claim against the bank over the alleged fraud. She headed another Gulf-based group of investors and claims that she was misled by senior Barclays executives over payments given to Qatar.