Former Barclays finance chief would have faced charges over Qatar rescue, trial hears

Chris Lucas served on the Barclays board for nearly six years. (Photo/Barclays)
Updated 10 October 2019

Former Barclays finance chief would have faced charges over Qatar rescue, trial hears

  • As a former bank director, Lucas arguably took direct responsibility for false representations
  • He stepped down in 2013 due to his health

LONDON: Former Barclays finance director Chris Lucas would have been criminally charged over two emergency fundraisings launched by the bank at the height of the financial crisis if he were not too ill to stand trial, a London fraud trial heard on Wednesday.
As a former bank director, Lucas, who stepped down in 2013 due to his health, arguably took direct responsibility for false representations in the bank’s public documents about capital raisings in June and October 2008, a prosecutor for the UK Serious Fraud Office (SFO) alleged.
The high-profile trial revolves around undisclosed payments to Qatar as Barclays raised more than 11 billion pounds from Doha and other investors to avert a state bailout as markets roiled in the global credit crisis.
Prosecutor Edward Brown highlighted the alleged role played by Lucas on the second day of the fraud trial of three former top Barclays executives; Roger Jenkins, Tom Kalaris and Richard Boath, at London’s Old Bailey criminal court.
“The prosecution say ... that Chris Lucas may be regarded as directly making a false representation in the Barclays documents (as a director),” Brown said, as the prosecution laid out its case.
“He (Lucas) is not a defendant, before the court, due to illness...But for his illness he would have been charged.”
Lucas’ lawyer declined to comment.
The defendants are charged with conspiring with Lucas to commit fraud by false representation as well as a separate charge of fraud by false representation. They deny wrongdoing.
The trial is expected to last five months. The defense will later present its case.
Barclays paid Qatar £322 million in fees that were not disclosed in public documents, such as the prospectuses and subscription agreements that outlined payments and commissions paid to investors as incentives for their support.
The prosecution alleges that the defendants breached well-established banking practice, under which all investors should be paid equally, and disguised these fees as “bogus” advisory services agreements (ASAs).
Brown said Barclays’ lawyers wanted evidence of services to justify the fees the bank was paying Qatar — and he alleged the defendants and Lucas had made “after the event” attempts to demonstrate some services had been provided.
But he added: “These did not come close to justifying the huge amounts paid over to the Qataris and, you may well conclude, were nothing more than a smoke-screen to seek to legitimize what had gone before.”
Qatar Holding, part of the Qatar Investment Authority sovereign wealth fund, and Challenger, an investment vehicle of former Qatari prime minister Sheikh Hamad bin Jassim bin Jabr Al-Thani, invested about 4 billion pounds in Barclays over 2008.
But that June, the Qataris demanded more than double what the bank had agreed to pay other investors and the defendants, knowing Barclays needed to strengthen its balance sheet in volatile markets, wrestled with how to pay them, Brown said.
Boath laid bare the pressure the bank was under.
“If he (Sheikh Hamad) doesn’t come through with his money, we’re f***ed,” Boath was quoted as saying on June 11, 2008, according to Brown.
Jenkins, the former chairman of the bank’s Middle East investment banking arm, Kalaris, who led the bank’s wealth division and Boath, a former European head of corporate finance, are charged with fraud and conspiracy to commit fraud by false representation over the first fundraising in June 2008.
Jenkins also faces both charges over the second fundraising that October.


Make or break days for global oil ahead of OPEC crunch meeting

Updated 08 April 2020

Make or break days for global oil ahead of OPEC crunch meeting

  • OPEC, led by Saudi Arabia, were on Thursday scheduled to take part in virtual discussions with non-OPEC members, led by Russia, about a possible deal to revive the OPEC+ alliance
  • On Friday, energy ministers from the G20 nations, under the presidency of Saudi Arabia, will convene in another digital forum that will bring in the third part of the global oil equation – the US

DUBAI: The global energy world, in the midst of crisis as demand slumps to unprecedented levels due to the coronavirus disease (COVID-19) pandemic, faces two days that could make – or break – the oil industry for months to come.
Leading producers from the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, were on Thursday scheduled to take part in virtual discussions with non-OPEC members, led by Russia, about a possible deal to revive the OPEC+ alliance that fell apart in Vienna at the beginning of last month.
Then, on Friday, energy ministers from the G20 nations, under the presidency of Saudi Arabia, will convene in another digital forum that will bring in the third important part of the global oil equation – the US, currently the biggest oil producer in the world.
If no deal is reached from the two days of oil summits, the immediate prospect looms of a further fall in crude prices and, with global storage facilities already filling rapidly, the possibility of major exporters “shutting in” oil fields, jeopardizing future production.
Energy experts say the purpose of the meetings is two-fold: To reach agreement on how to limit the vast quantities of oil that are still being produced even as demand collapses; and to present some kind of united front in geopolitical terms in the face of the biggest economic recession since the 1930s.
The most visible immediate sign of any success from the meetings will be an increase in the price of crude oil on global markets. Brent crude, the Middle East benchmark, has lost nearly half its value in the past month.
The first aim – to try to balance oil supply and demand – is the more difficult. Global demand has fallen by at least 20 per cent from the usual daily consumption of around 100 million barrels, oil economists have calculated.
But, following the collapse of the OPEC+ deal that was putting a lid on supply, all producers have been pumping more crude. Saudi Arabia is producing more than 12 million barrels per day (bpd), a bigger volume than at any time in its history. All OPEC members, as well as Russia, have said they will increase output.
In this stand-off, US President Donald Trump intervened last week to say that he had spoken to Saudi and Russian leaders and that he “expected” a cut of 10 million, possibly even 15 million, bpd.
That looks like wishful thinking. For one thing, it would not rebalance markets. Anas Al-Hajji, managing partner of US-based Energy Outlook Advisers, said: “The amount of the cut is relatively small given the major drop in demand.”
There are also some difficult relationships to smooth over in the OPEC+ alliance. Saudi Arabia and Russia exchanged angry statements last weekend, each accusing the other of starting the oil price war. Iran, with big reserves but hampered by US sanctions from exporting in large quantities, said that it might not take part in the conference.
The choreography of the two meetings also presents hurdles. The US will not be present at the OPEC+ meeting, but American Secretary of Energy Dan Brouillette said he would take part in the G20 event.
Because it is a free-market industry, America cannot order its oil producers to reduce output, but most analysts are agreed any attempt to rebalance global supply would be impossible without a US contribution.
By going first, Saudi Arabia and Russia are “playing blind” without knowing what the Americans are thinking. Neither would want to agree big price-restoring cuts only for US producers – under big financial pressure at current levels – to swoop back into the market.
This week there have been some signs that the Americans are considering their own versions of cutbacks. The biggest US company, Exxon Mobil, said it would reduce capital expenditure on future projects by 30 percent; the US Energy Information Administration said oil production would fall by nearly 1 million bpd this year, in response to falling demand and financial pressures.
But even if the Saudis and Russians cut substantially alongside other big OPEC producers such as the UAE, and the Americans enter a long-term pattern of falling demand, it is still hard to see how cuts could reach the 10 million barrels Trump “expects,” let alone 15 million.
J. P. Morgan, the big US investment bank, said that it expects OPEC+ to come up with combined cuts of about 4.3 million barrels, most of that coming from Saudi Arabia, Russia and the UAE. “If it’s 4.3 million it only puts off the day when global storage gets filled completely,” said Robin Mills, CEO of Qamar Energy consultancy.
Storage facilities are nearly at the brim. Malek Azizeh, director of the premium facilities at the Fujairah Oil Terminal in the UAE, joked that he was going to hang a sign on the terminal gates: “Thanks, but no tanks.”