Introducing Behind the Money: Barclays and the legal fight over a 'controlling mind'
March 17, 2020
AI Summary
5 min readIn June 2008, as the financial crisis was deepening, Barclays raised £4.4 billion from investors including the sovereign wealth fund of Qatar. The bank paid those investors a standard 1.5 percent subscription fee. But Qatar wanted more—roughly double that fee. What happened next, and how British prosecutors tried and failed to hold anyone accountable for it, is the subject of this episode of the FT’s Behind the Money. The story stretches from a chance meeting on a yacht in Sardinia to a criminal trial that collapsed after a jury took less than six hours to acquit three former Barclays bankers, ending a seven-year, £12.2 million investigation by the Serious Fraud Office (SFO) with no convictions at all.
The Sardinian dinner and the race to avoid a bailout
The key relationship began in 2007, when Barclays banker Roger Jenkins—nicknamed “Big Dog” inside the bank and known for his aggressive tax-avoidance unit—attended a dinner party on a yacht in Sardinia. Also present was Sheikh Hamad bin Jassim bin Jaber Al Thani, then the Prime Minister of Qatar and chairman of its powerful sovereign wealth fund. For Jenkins, who headed Barclays’ Middle East unit, the connection was a career-defining opportunity.
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What you'll learn
- 1 (00:00) **Introduction to the 2008 Financial Crisis and Barclays' Avoidance of a Bailout** - The episode sets the stage with the Lehman Brothers collapse and the UK government's bailout of major banks, contrasting Barclays' decision to raise capital privately to avoid government control.
- 2 (02:49) **The Key Players: Roger Jenkins and the Prime Minister of Qatar** - The story begins in 2007 with a chance meeting between Barclays banker Roger Jenkins and the Prime Minister of Qatar, Sheikh Hamad bin Jassim bin Jaber Al Thani, on a yacht in Sardinia.
- 3 (05:08) **The First Capital Raising and the Need for More Cash** - As the financial crisis deepened in 2008, Barclays raised £4.4 billion from investors including Qatar Holding, but the collapse of Lehman Brothers in September created an even more urgent need for capital.
- 4 (08:10) **The Second Fundraising and the Promise of a Huge Bonus** - In October 2008, Barclays raised £6.8 billion through a complex debt issuance, and Roger Jenkins was promised a £25 million bonus for his role in securing the deal.
- 5 (10:00) **The Discovery of Suspicious Emails** - During a routine regulatory visit in 2011, investigators uncovered emails and phone calls that pointed to undisclosed side deals and inducements for Qatar, triggering a decade-long fraud investigation.
- 6 (12:52) **The "Advisory Services Agreement" as a Side Deal** - To pay Qatar the extra fee without disclosing it, the bankers devised a fake "Advisory Services Agreement" (ASA), which was presented as a legitimate payment for business development services.
- 7 (14:20) **Internal Concerns About Legal Recourse and Jail Time** - Phone calls between bankers reveal their awareness that the side deal could be challenged by regulators, other investors, or criminal authorities, with one banker saying he was "already feeling sick."
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Show Notes
Behind the Money is a podcast from the Financial Times that takes listeners inside the business and financial stories of the moment with reporting from FT journalists around the world. You can find Behind the Money wherever you get your podcasts, including FT.com/behindthemoney.
A costly investigation into the conduct of senior Barclays bankers during the 2008 financial crisis has raised questions about what it means to prosecute allegations of corporate crime, and whether Britain’s fraud laws need overhauling. The FT's Caroline Binham and Jane Croft report.
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