LONDON (Reuters) - A former senior Barclays (BARC.L) executive was “panicking” about the risk of a state bailout during the credit crisis in 2008 because he feared government scrutiny of his multi-million pound remuneration, a London criminal trial heard on Tuesday.
Roger Jenkins, the bank’s former rainmaker in the Middle East who negotiated two emergency capital calls over a decade ago, told colleagues at the time that the government “wouldn’t look kindly on compensation over a million dollars”.
Prosecutors in the high-profile Serious Fraud Office (SFO) trial, which turns on undisclosed fees paid to Qatar as Barclays struggled to raise around 11 billion pounds in emergency capital calls in 2008, painted a picture of stricken lenders and jittery markets as the financial crisis deepened that October.
Jenkins and two former senior colleagues, Richard Boath and Tom Kalaris, are charged with fraud by false representation and conspiracy to commit fraud by false representation.
They deny the charges.
Reading out extracts of a telephone call between Jenkins, Boath and a third colleague that Oct. 8, prosecutor Edward Brown quoted Jenkins as telling his colleagues he had been up at 2am fretting about nationalization.
“...the way the UK works, they’re going to say we want the top ten or twenty earners and we want to review them...,” Jenkins was quoted as telling his colleagues in a conversation in which he also joked that his own remuneration “was nothing”.
Jenkins was paid 39.5 million pounds ($50 million) in salary and incentive plans in 2007. He was also recommended a payment of 25 million pounds for his role in two capital raisings, the jury at London’s Old Bailey criminal court was told.
Kalaris, the former CEO of the bank’s wealth management business, received 13 million in 2007 and 7.7 million in 2008. Boath, the investment bank division’s head of corporate finance for Europe, the Middle East and Africa, was paid 2.87 million in 2007 and 1.87 million in 2008, the prosecutor said.
Prosecutors allege that Barclays paid Qatar 322 million pounds in extra, secret fees for participating in two fundraisings in June and October 2008, which were disguised as “bogus” advisory service agreements (ASA).
Jenkins told colleagues in the same recorded telephone conversation that Qatar would be paid a fee for investing in the bank in comments that looked like a “complete acceptance” of core allegations against him, Brown alleged.
“Here was Roger Jenkins, at the time, not suggesting that the ASA was anything about genuine advisory services of value at all. It was nothing more than a fee for investing and Mr Jenkins said so,” Brown said.
Jenkins is the only defendant charged over the October 2008 fundraising as well as the June 2008 capital call.
Qatar, which invested around 4.0 billion pounds in Barclays over 2008, has not been accused of wrongdoing.
The trial, expected to last around five months, continues.
Reporting by Kirstin Ridley; Editing by Nick Macfie