Former Barclays executive felt sick over 2008 Qatar deal, court hears

Richard Boath told in-house lawyers he felt sick when he was told the bank could be challenged by criminal authorities over side deals with Qatar during a 2008 emergency fundraising. (File/Reuters)
Updated 07 March 2019

Former Barclays executive felt sick over 2008 Qatar deal, court hears

  • Richard Boath told in-house lawyers he felt sick when he was told the bank could be challenged by criminal authorities over side deals with Qatar during a 2008 emergency fundraising
  • Extracts of transcripts of telephone conversations and emails were read out and shown to the court by the prosecution on Wednesday

LONDON: A former Barclays executive told in-house lawyers he felt sick when he was told the bank could be challenged by criminal authorities over side deals with Qatar during a 2008 emergency fundraising, a London fraud trial heard on Wednesday.
Richard Boath, in the dock at Southwark Crown Court with former Barclays CEO John Varley and former senior colleagues Roger Jenkins and Tom Kalaris, told investigators in 2016 he also thought Qatar should have been told to “**** off” when it demanded additional fees when helping bail the bank out.
The four men are charged with conspiracy to commit fraud by false representation over how they secured a two-part, 11 billion pound-plus ($14 billion) capital raising as the bank scrambled to avoid a state bailout during the financial crisis.
The Serious Fraud Office (SFO), which is prosecuting the case, alleges the defendants misled shareholders and other investors by not disclosing that Barclays paid an extra 322 million pounds to Qatar through advisory service agreements (ASAs), which the SFO says were not genuine.
The men deny wrongdoing.
Extracts of transcripts of telephone conversations and emails were read out and shown to the court by the prosecution on Wednesday.
Former in-house Barclays lawyer Judith Shepherd told Boath on June 18, 2008, that the bank had to show it had received valuable services from Qatar in return for the ASA — or risk other investors, the market regulator and criminal authorities viewing them as disguised commissions for the capital raising.
“I’m already feeling sick. There’s no need to use all those words to make me feel sicker,” Boath responded in the telephone call, according to one transcript.
Eight years later, Boath told SFO investigators that although he had not liked the Qatar deal, it had been negotiated by his seniors, approved by lawyers and that he thought the bank believed it would get value for the money.
“The lawyers persuaded themselves that even though they knew that the ASA in June was a consequence, a response to the request from the Qataris for additional fees, it didn’t matter as long as we got value for services,” Boath, the bank’s former head of European financial institutions group, told the SFO, according to interview transcripts read out to court.
Boath said that Jenkins, who was negotiating with the Gulf state, had “real heft” in Qatar and was a “big deal down there.” “I believed Roger would get his pound of flesh,” he said, according to the transcripts.
“I don’t think (former finance director) Chris Lucas or John Varley would ever have signed off on it if they thought that they were not going to get value for their services,” he added in a recorded interview that was played to the court.
Asked by the SFO investigator if the ASA in June 2008 was a disguised commission, Boath replied: “No. The advisory service agreement was put in place by Barclays in exchange for services that they expected Roger to get value for.”
“Judith goes on to say: ‘Well, Big Dog will be in the dock first’,” the SFO investigator noted in the 2016 interview.
“Yeah, that’s Roger, by the way,” Boath said in the recorded SFO interview.
Lucas has not been charged because he is too unwell to stand trial, the jury has been told. Shepherd, the Barclays lawyer, and Qatar have not been accused of any wrongdoing.


US trade offensive takes out WTO as global arbiter

Updated 10 December 2019

US trade offensive takes out WTO as global arbiter

  • Two years after starting to block appointments, the US will finally paralyze the WTO’s Appellate Body
  • Two of three members of Appellate Body exit and leave it unable to issue rulings

BRUSSELS: US disruption of the global economic order reaches a major milestone on Tuesday as the World Trade Organization (WTO) loses its ability to intervene in trade wars, threatening the future of the Geneva-based body.
Two years after starting to block appointments, the United States will finally paralyze the WTO’s Appellate Body, which acts as the supreme court for international trade, as two of three members exit and leave it unable to issue rulings.
Major trade disputes, including the US conflict with China and metal tariffs imposed by US President Donald Trump, will not be resolved by the global trade arbiter.
Stephen Vaughn, who served as general counsel to the US Trade Representative during Trump’s first two years, said many disputes would be settled in future by negotiations.
Critics say this means a return to a post-war period of inconsistent settlements, problems the WTO’s creation in 1995 was designed to fix.
The EU ambassador to the WTO told counterparts in Geneva on Monday the Appellate Body’s paralysis risked creating a system of economic relations based on power rather than rules.
The crippling of dispute settlement comes as the WTO also struggles in its other major role of opening markets.
The WTO club of 164 has not produced any international accord since abandoning “Doha Round” negotiations in 2015.
Trade-restrictive measures among the G20 group of largest economies are at historic highs, compounded by Trump’s “America First” agenda and the trade war with China.
Phil Hogan, the European Union’s new trade commissioner, said on Friday the WTO was no longer fit for purpose and in dire need of reforms going beyond just fixing the appeals mechanism.
For developed countries, in particular, the WTO’s rules must change to take account of state-controlled enterprises.
In 2017, Japan brought together the United States and the European Union in a joint bid to set new global rules on state subsidies and forced technology transfers.
The US is also pushing to limit the ability of WTO members to grant themselves developing status, which for example gives them longer to implement WTO agreements.
Such “developing countries” include Singapore and Israel, but China is the clear focus.
US Commerce Secretary Wilbur Ross told Reuters last week the United States wanted to end concessions given to then struggling economies that were no longer appropriate.
“We’ve been spoiling countries for a very, very long time, so naturally they’re pushing back as we try to change things,” he said.
The trouble with WTO reform is that changes require consensus to pass. That includes Chinese backing.
Beijing has published its own reform proposals with a string of grievances against US actions. Reform should resolve crucial issues threatening the WTO’s existence, while preserving the interests of developing countries.
Many observers believe the WTO faces a pivotal moment in mid-2020 when its trade ministers gather in a drive to push through a multinational deal — on cutting fishing subsidies.
“It’s not the WTO that will save the fish. It’s the fish that are going to save the WTO,” said one ambassador.