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.


NMC Health’s new executive chair vows to recover misused funds

Updated 05 April 2020

NMC Health’s new executive chair vows to recover misused funds

  • London-listed NMC recently revised its debt position to $6.6 billion, much higher than earlier estimated
  • NMC’s stock has more than halved in value since December and trading in its shares was suspended in February

DUBAI: The new executive chairman of hospital operator NMC Health vowed on Saturday to work with authorities in Britain and the United Arab Emirates (UAE) to recover misused funds and called on the company’s creditors for a debt standstill.
Faisal Belhoul said in a statement that keeping NMC Health operating was a “national priority,” particularly as the country and the world battle the coronavirus pandemic.
Belhoul said putting the hospital operator into administration would “cause instability to the operating businesses of the NMC Group, creating additional pressure on the group’s liquidity and reducing value for all creditors.”
A temporary debt standstill, by contrast, would allow the firm to prepare and activate a recovery plan.
London-listed NMC recently revised its debt position to $6.6 billion, much higher than earlier estimated.
NMC’s stock has more than halved in value since December and trading in its shares was suspended in February. The decline was triggered by a report by short seller Muddy Waters that questioned the company’s financial statement.
Belhoul’s appointment was made after the company’s non-executive directors uncovered alleged theft and excess undisclosed borrowings by former directors of the company, the statement said.
Belhoul is a founder and chairman of Ithmar Capital Partners, which owns a 9% stake in NMC.
“We are working in full cooperation and in close dialogue with authorities in the UAE and UK, including the UK’s Financial Conduct Authority (FCA), and will vigorously chase down the perpetrators for return of these funds,” he said.
Abu Dhabi Commercial Bank, one of more than 80 local, regional and international creditors, said last week it had over $981 million exposure to NMC Health.
NMC Health claims to be the largest private health care company in the UAE, operating more than 200 facilities, which includes hospitals, clinics and pharmacies.
“The NMC Group is currently treating hundreds of people suspected of having COVID-19 and in the UAE has screened more than 10,000 workers for the virus in partnership with the Ministry of Health and Prevention and the Ministry of Human Resources and Emiratization,” the statement said.