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.

Singapore lowers growth forecast as virus hits economy

Updated 17 February 2020

Singapore lowers growth forecast as virus hits economy

  • Tourist arrivals, exports and domestic consumption affected in city-state

SINGAPORE: Singapore cut its economic growth forecast for this year on Monday as the coronavirus batters tourist arrivals and trade.

The city-state is one of the worst affected places outside China, with 75 cases of the virus so far. China has more than 70,000 infections.

Singapore downgraded its 2020 growth estimate to a range of -0.5 percent to 1.5 percent.

That compares with its previous forecast in November of 0.5 percent to 2.5 percent.

“The outbreak of the coronavirus . . . has affected China, Singapore and many countries around the world,” the trade ministry said in a statement. “In Asia, the outbreak is likely to dampen the growth prospects of China and other affected countries this year.”

Tourism arrivals have already started to decline, exports are expected to take a hit, and domestic consumption is likely to fall as people cut back on shopping and dining out, it added.

China is Singapore’s largest source of tourists and a major export destination.

The city-state was at risk of sliding into a technical recession, warned Song Seng Wun of CIMB Private Banking.

“There is a real possibility of two quarters of contraction or even two quarters of year-on-year decline,” he said.

“Mathematically it’s possible because of the integrated nature of the global supply chain and the impact of the slowdown in China that could have far-reaching implications on small trade-oriented economies like Singapore.”

As a small and open economy, Singapore is often the first to be hammered during global crises but it also recovers quickly when conditions improve.

Prime Minister Lee Hsien Loong last week warned the effect of the virus was already worse than that of the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003, as economies in the region are more closely linked and raised the possibility of a recession for Singapore.

“I think the impact will be significant at least in the next couple of quarters . . . I can’t say whether we’ll have a recession or not, it’s possible, but definitely our economy will take a hit,” he told reporters on Friday.

Singapore suffered a sharp, quarterly contraction at the height of the SARS outbreak, which killed hundreds after emerging in China, but bounced back swiftly.

National Development Minister Lawrence Wong last week flagged a “strong” budget — due to be delivered Tuesday — to counter the impact of virus.