A Qatari chief spoke to then prime minister Gordon Brown throughout the 2008 monetary disaster as Barclays financial institution got here beneath growing strain to just accept authorities cash, a former financial institution boss has informed a excessive courtroom decide.
Former Barclays chief govt John Varley informed Mr Justice Waksman how Qatari prime minister Sheikh Hamad spoke to Brown in October 2008 to “defuse” that strain.
Varley stated Sheikh Hamad “sought reassurance” from Brown that Qatar’s curiosity in Barclays wouldn’t be “forcibly diluted” by necessary authorities funding.
He stated he didn’t need Barclays to enter authorities possession and informed the decide a few “bleak” assembly with then-chancellor Alistair Darling.
Varley was giving proof at a excessive courtroom trial in London on Thursday after Barclays grew to become embroiled in a £1.6bn battle with a businesswoman.
Amanda Staveley has made complaints concerning the behaviour of Barclays bosses when negotiating funding offers throughout the 2008 monetary disaster.
She says Barclays agreed to offer an unsecured £2bn mortgage to Qatari buyers.
However she says that mortgage was “hid” from the market, shareholders and from PCP Capital Companions, a personal fairness agency she runs.
PCP is suing the financial institution and desires £1.6bn in damages.
Staveley, who in current months has been concerned in brokering a deal which might see a Saudi consortium take management of Newcastle United, says PCP launched Manchester Metropolis proprietor Sheikh Mansour to Barclays and he “subscribed” to take a position £3.25bn.
She says PCP is owed cash for the work it did.
Barclays disputes PCP’s declare, which is says is made “of sand”.
Varley informed Mr Justice Waksman how Barclays had a “strengthening relationship” with Qatar within the autumn of 2008.
“I recall that Sheikh Hamad had sought reassurance from the UK prime minister, Gordon Brown, that Qatar’s curiosity in Barclays wouldn’t be forcibly diluted by necessary authorities funding,” stated Varley in a written witness assertion.
“The financial institution got here beneath growing strain to just accept the federal government’s cash as October progressed, and I recall that Sheikh Hamad additionally spoke with Gordon Brown and different ministers to defuse this strain.”
He added: “I regarded this as a rare demonstration of the strengthening relationship between the financial institution and Qatar.”
Varley, Barclays chief govt between late 2004 and late 2010, stated he “feared for the results” of the “strategic path” if Barclays grew to become part-owned by the federal government.
He stated he thought that authorities possession could be “very damaging” to the pursuits of shareholders.
Authorities possession would have in all probability put jobs in danger and affected the financial institution’s skill to pay bonuses to workers, he stated.
Varley stated that might have broken the retention and recruitment of employees. He informed how he and different financial institution chief executives had met Darling in October 2008. “The assembly was bleak,” he stated.
“One have a look at Fred Goodwin, CEO of RBS, and at Andy Hornby, CEO of HBOS, informed me that the times of independence for his or her banks had been over.”
He added: “The realisation of that was very alarming.”
The decide has heard that Barclays entered into an “advisory companies settlement” with Qatar. Varley stated there had been a “desirability” to enter right into a “strategic partnership” with Qatar.
He stated he seen that settlement as “per that goal” and it was “not a sham”. He stated Sheikh Mansour had the traits Barclays was in search of in an “anchor investor candidate”.
However he stated neither PCP nor Staveley themselves would have happy Barclays’ “standards”.
“I perceive that Ms Staveley claims that PCP additionally represented different potential buyers, and that PCP thought of itself a possible investor within the financial institution,” he stated.
“I’ve no recollection of any particular person – together with Ms Staveley – indicating to me at any time that PCP was itself a possible principal, nor that it was representing anybody aside from Sheikh Mansour or his pursuits.”
He stated the concept that PCP itself could be an investor in “capital elevating” wouldn’t have “held any attraction”.
Mr Justice Waksman, who started overseeing the trial on eight June, has already heard proof from Staveley and witnesses referred to as by PCP.