* All three former bank executives cleared
* Jury took just five hours to reach verdict
* A blow for under-fire Serious Fraud Office
* Case involved Qatar fees during 2008 fundraising
(Adds comment from Roger Jenkins, Qatar's QIA, Sheikh Hamad)
By Kirstin Ridley
LONDON, Feb 28 (Reuters) - Three former Barclays
executives were unanimously acquitted on Friday of charges they
helped funnel 322 million pounds ($418 million) in secret fees
to Qatar in return for rescue financing during the credit
crisis.
A jury at London's Old Bailey criminal court cleared Roger
Jenkins, Tom Kalaris and Richard Boath of fraud after just five
hours of deliberation in what lawyers said was a crushing blow
to the UK's taxpayer-funded Serious Fraud Office (SFO).
The men, aged between 61 and 64, had all denied wrongdoing.
Jenkins, a rainmaker described as the "gatekeeper" to the
Qataris, said he had "lived under a cloud" since the
investigation began around eight years ago.
"This has taken an enormous toll on me both economically and
personally, and I look forward now to rebuilding my life," he
said in a statement.
Boath, the bank's former financial institutions boss, told
reporters waiting in the rain outside the court that the case
had been a "complete invention" and that a regulatory probe had
cleared him years ago.
Asked about his plans, he said: "I'm going for lunch."
END OF THE ROAD
The verdict draws a line under an ambitious inquiry that led
to the first British criminal charges against senior financiers
at a major bank over conduct during the credit crisis.
It also marks the likely end of efforts by prosecutors to
hold top bankers to account for decisions taken when a global
financial meltdown triggered vast taxpayer bailouts of banks.
The SFO, which filed charges a month after the ruling
Conservative Party pledged to abolish the agency and roll it
into a national crime-fighting force in 2017, said it remained
determined to pursue perpetrators of serious financial crime.
But it was a tough case. The most senior defendant, former
CEO John Varley, was acquitted last June for lack of evidence
and the case against Barclays, which centred on alleged unlawful
financial assistance to Qatar through a $3 billion loan, was
dismissed in 2018.
Zoe Osborne, a lawyer at Steptoe & Johnson, said it had been
"absolutely the wrong case to pursue". The SFO, which estimated
it had spent around 10 million pounds on the case.
"It is a crushing loss that should be seen by the SFO as a
painful lesson that it needs to heed," said Aziz Rahman, a
lawyer at Rahman Ravelli.
SECRET PAYMENTS
Qatar Holding, part of the $300 billion Qatar Investment
Authority (QIA) sovereign wealth fund, and Challenger, former
Qatari prime minister Sheikh Hamad bin Jassim bin Jabr
al-Thani's investment vehicle, ploughed about 4 billion pounds
into Barclays in June and October 2008.
The SFO alleged Jenkins, Kalaris and Boath conspired with
ex-finance director Chris Lucas to disguise an extra 42 million
pound payment with a bogus, three-year advisory services
agreement (ASA) after the Gulf state demanded more than twice
the fees Barclays was paying other investors in June 2008.
Jenkins was also charged over the bank's subsequent, 280
million pound, five-year ASA struck with Qatar four months
later, as the bank tapped investors for a second time in a
two-part, 11 billion pound fundraising.
The men said the ASAs were intended as genuine mechanisms to
pay Qatar what it wanted while extracting lucrative, commercial
business from Qatar, that such side deals were common in
banking, that senior directors had authorised the parameters of
negotiations and, along with lawyers, had approved the deals.
Qatar's QIA, which said in a statement it remains a
"committed shareholder, investor and partner to Barclays", was
neither investigated nor accused of wrongdoing.
"Our investments in Barclays created a strategic partnership
with the bank and were part of our plan to build a global
financial portfolio," a spokesperson said.
A statement issued on behalf of Sheikh Hamad said that the
ASAs were genuine and had provided for potential substantial
transactions.
A lawyer for Lucas, who was not charged because he was too
ill to stand trial, declined to comment.
NERVOUS NELLIE
Much of the case was built on recorded conversations on the
telephone line of Boath, nicknamed "Nervous Nellie" by his
counsel.
Boath fretted the June ASA looked "dodgy", that it could be
seen as a "bung" and said he felt sick at the thought of having
to demonstrate to authorities that Qatar had provided services,
transcripts of conversations and SFO interviews showed.
But Boath also said he had been reassured after seniors
approved the deal and had confidence that Jenkins would get the
value back from Qatar. "He is a very impressive individual," he
told the SFO in 2014, transcripts shown to the court showed.
Defence lawyers said Boath had not fully grasped that Sheikh
Hamad could provide Barclays with lucrative, commercial business
opportunities by just opening his rolodex.
Jenkins, who was recommended a 25 million pound bonus for
his work in 2008, told the jury that Sheikh Hamad would have
been insulted if he had been asked to spell out his promises,
but that he had believed "with a passion" in the ASAs.
After a heart attack in early August 2008, Jenkins said he
was ordered back to work a month later to help save Barclays.
The case does not end legal action over the way Barclays
behaved during the financial crisis.
The bank is still contesting a 1 billion pound-plus civil
lawsuit from businesswoman Amanda Staveley, who arranged an
investment from Abu Dhabi investors.
And the Financial Conduct Authority markets regulator in
2013 proposed a 50 million pound fine over how Barclays made
disclosures about its dealings with Qatar. That investigation
has been on hold pending the outcome of the criminal case.
($1 = 0.7696 pounds)
(Additional reporting by Lawrence White and Eric Knecht in
Beirut; Editing by Alexander Smith)
Barclays (BARC)
