Barclays was basically dead without Qatari cash, London court told

Former Barclays CEO, John Varley (R), leaves Southwark Crown Court. (AFP)
Updated 24 January 2019

Barclays was basically dead without Qatari cash, London court told

LONDON: Richard Boath, an ex-Barclays boss on trial on fraud allegations, said the bank would be "basically dead" without a Qatari cash injection in 2008, a prosecutor said on Thursday.
The Serious Fraud Office prosecutor told the trial of Barclays' ex-chief executive John Varley and three former senior executives that Qatar had played hardball as the British bank struggled to shore up its balance sheet during the financial crisis.
"Without £1 billion, at the very least, from Q (Qatar) we are basically dead," Boath told his Barclays line manager on May 28, 2008, in a communication read out in Southwark Crown Court by prosecutor Edward Brown on the second day of the case.
Former CEO Varley, Roger Jenkins, Tom Kalaris and Boath deny conspiring to commit fraud by false representations when Barclays raised more than £11 billion ($14 billion) from investors in 2008, allowing it to avert a British state bailout.
Prosecutors allege the bankers hid from public documents around £322 million in secret fees paid to the Qatari investors as they fought to meet their tough demands.
Jenkins, former chairman for the Middle East of the BarCap business, was the "gatekeeper for Qatar", Brown said, adding that when the Gulf state said it might invest at least £1 billion in May 2008, there was initial delight at Barclays.
"Made my day. Know we have to get it over the line, but it's a great starting point for the conversation," Varley told Bob Diamond, the American executive who later replaced him as CEO, around May 13, 2008 in communications read out in court.
But this was short-lived after Qatar asked first for a fee of 3.75 percent in return for investing - substantially above the 1.5 percent Barclays was offering other investors - before settling on 3.25 percent, the prosecution alleged.
Trying to structure this deal proved a headache, Brown added, because all investors had to be offered the same terms.
The case hinges in part on whether so-called advisory services agreements were for genuine services to be provided by Qatar or a means for Barclays to pay extra fees it demanded.
Transcripts of telephone and email conversations between Barclays executives at the time show the bankers debating the bank's vulnerable condition and the need to get the Qatari investment at all costs, the prosecution alleged.
"They've got us by the balls because the price is so low," Boath told a senior colleague, referring to Qatar's tough stance and the bank's low share price.
Some of the executives also joked about the possibility of going to jail if the Qatari deal did not play by the rules.
"None of us wants to go to jail here," Kalaris said to Boath in a recording of a telephone conversation played to the court. "The food sucks and the sex is worse," Kalaris added.


UK retail sales shoot past pre-virus levels as shoppers migrate online

Supermarkets such as Sainsbury’s have avoided many of the problems plaguing the rest of the retail sector amid the coronavirus pandemic. (Reuters)
Updated 19 September 2020

UK retail sales shoot past pre-virus levels as shoppers migrate online

  • Britain suffered the biggest economic hit of any G7 economy between April and June, when output fell by more than 20 percent

LONDON: British shoppers continued to increase spending last month, taking sales further above pre-COVID levels, as strong online demand helped much of the sector enjoyed a faster rebound than the rest of the economy.
Retail sales volumes rose by 0.8 percent in August, the Office for National Statistics said — slightly above the average 0.7 percent forecast in a Reuters poll — and, compared with a year earlier, they were up 2.8 percent, just below forecasts of 3 percent annual growth.
British retail sales had already overtaken pre-COVID levels in July and now stand 4 percent higher than before the crisis.
However, the rebound masks a sharp split between online and high-street retailers, with online and mail order retailing up 34.4 percent on the year in August, while many traditional retailers outside the grocery sector have suffered reduced footfall.
“Clothing stores continued to struggle, with sales still well below their February level. Overall, the switch to greater online sales means the high street remains under pressure,” ONS deputy national statistician Jonathan Athow said.
The crisis in traditional retailing is having a knock-on effect for commercial landlords, with many stores closing and tenants such as clothing chain New Look seeking to renegotiate rents to link them to turnover.

FASTFACT

British retail sales now stand 4 percent higher than before the crisis.

Clothing sales rose by 13.5 percent on the month, but are still 15.5 percent down on the year.
Grocery sales rose just 0.4 percent in August, after strong growth in previous months when British people had eaten at home more.
August saw a temporary government promotion for dining in restaurants, named “Eat Out to Help Out,” which earlier industry data suggested had dented grocery demand.
The Bank of England (BoE) said on Thursday that Britain’s economy was on course to recover faster than it had forecast in August, but, even so, output in the July-September period is expected to be 7 percent lower than in the final quarter of last year.
Britain suffered the biggest economic hit of any G7 economy between April and June, when output fell by more than 20 percent.
The BoE identified consumer demand as one of the brighter spots, but said it was vulnerable to an upsurge in COVID-19 cases as well as an increase in unemployment when the government’s temporary job support program ends next month.