Abu Dhabi, UAESunday 25 October 2020

Former Qatar PM wanted to be 'special Gulf guy' behind Barclays rescue

High-flying British banker first met Qatar’s head of sovereign wealth fund for dinner on yacht

Roger Jenkins, former chairman of investment banking for the Middle East at Barclays, is on trial for fraud. Bloomberg
Roger Jenkins, former chairman of investment banking for the Middle East at Barclays, is on trial for fraud. Bloomberg

Qatar’s former prime minister wanted to be seen as the “special Gulf guy” in a fund-raising operation to rescue British bank Barclays during the 2008 financial crisis, a court heard on Monday.

Sheikh Hamad bin Jassim bin Jaber Al Thani would not want to share the credit for saving the bank with other regional sovereign wealth funds, senior Barclays banker Roger Jenkins wrote in an email to a colleague in May 2008.

Details of the email emerged at the criminal trial of Mr Jenkins and two other bankers accused of fraud for alleged involvement in hiding secret multi-million-pound payments to Qatar in return for £4 billion from the Gulf state to secure the future of the bank.

A London court heard that Barclays had also been sounding out the sovereign wealth funds of Abu Dhabi and Kuwait but senior executives were concerned about the impact it would have on attracting funds from Qatar.

“Oh yes, he won’t like that,” said Mr Jenkins, the former head of Middle East banking who had nurtured the relationship with Sheikh Hamad, told a senior colleague in an email. “He wants to be our special Gulf guy.”

Mr Jenkins, 64, detailed how his relationship with Sheikh Hamad blossomed after they met for dinner on a yacht owned by a friend of the banker’s wife in Sardinia, Italy, in 2007.

The pair later met in Cannes and during a succession of trips to Doha when their discussions expanded from conversations about Qatar’s investment in British supermarket chain Sainsbury, to the possibility of putting money into the bank.

Mr Jenkins told the court that the bank was trying to build a long-term relationship with Qatar and Sheikh Hamad, who was prime minister, foreign minister and ran the Qatar Investment Authority until 2013. Sheikh Hamad had predicted that the sovereign wealth fund built on the emirate’s oil and gas wealth would be worth some $300bn.

“We were trying to build a relationship between our institutions,” Mr Jenkins told a jury. “He would be the person we would build our relationship with in the Gulf. He thought that was important.”

Barclays – like many other banks – was hit hard by the global crisis and secured some £11bn in 2008 to avoid being taken over by the UK government.

Emails shown at the trial indicated that Mr Jenkins was speaking to the Qataris about investing in the bank before the seriousness of the bank’s own situation came to light.

Mr Jenkins emailed the bank’s chief executive John Varley in January 2008 saying that he had become “close friends” with Sheikh Hamad and the pair had met over Christmas in Los Angeles, where the banker lived. He told his boss that Qatar was prepared to invest in the bank.

In his response, Mr Varley warned against giving Qatar the impression of a deal to prop up the bank unlike “the losers” such as investment bank Bear Stearns and stockbroker Merrill Lynch, which both collapsed during the financial crisis.

“We have been a winner in the turmoil and we have no need of a prop up,” Mr Varley wrote back. “So everything we do with them needs to reflect… that fact.”

The £4bn eventually provided by Qatar was seen as crucial to the fund-raising operation but Sheikh Hamad sought returns far in excess of other investors, a move that prosecutors claimed could have scuppered the whole deal.

Prosecutors claim the three men got around the problem by helping to create two bogus agreements that paid out £322 for services that the Qataris never provided. US-based Mr Jenkins, 64, the first of the defendants to give evidence in the trial, received a £25 million bonus for negotiating the deal with Qatar, the court has been told.

Mr Jenkins, Tom Kalaris, 63, and Richard Boath, 60, all deny fraud.

Updated: November 25, 2019 09:38 PM

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