The former chief executive of Barclays worried that a 2008 meeting between Gordon Brown and the Dalai Lama would anger Chinese investors and put a multibillion rescue package at risk, just as the bank was finalising fundraising terms with Qatar, a court heard on Friday.
Barclays was scrambling to find big investors who would commit billions of pounds to shore up the lender’s balance sheet and avoid a state bailout – a fate that befell its high street peers Northern Rock, RBS and HBOS.
Prosecutors for the Serious Fraud Office presented an email to the jury at Southwark crown court that was written by former chief executive John Varley to then-chairman Marcus Agius.
He was briefing Agius on a recent meeting with Qatari investors – codenamed “Quail”. The email, dated 25 May 2008, came just days after Brown held a meeting with the Tibetan spiritual leader at Lambeth Palace, the archbishop of Canterbury’s London residence.
“There has been a lot of work with Quail over the weekend which I’d like to brief you on,” Varley wrote.
“They [Qatari investors] are playing hardball. In addition … I can’t gauge whether the Chinese … will take the opportunity of playing hardball too because of their anger at the Brown-Dalai Lama meeting,” he wrote. “That risk influences my thinking on how we should play Quail.”
Conversations and emails presented in court showed Barclays bosses discussing the bank’s need to “hurry up” with its fundraising.
The jury was played a recorded telephone conversation between Richard Boath, the bank’s former European financial institutions boss, and Robert Morrice, the former CEO of Barclays Asia.
“Everybody knows Barclays needs money … we need to be less cute … hurry up and pay the price and get people signed up … just fucking make it happen,” Boath said.
“We need £4bn pretty quickly … they try and be too smart about this shit,” Morrice said according to transcripts. “They’ve got us by the balls because the price is so low,” he added.
The SFO alleges that four former Barclays executives – Varley, Boath, Roger Jenkins and Tom Kalaris – lied to the stock market and other investors about how £322m in fees were paid to Qatar in relation to emergency fundraising of more than £11bn in 2008.
Prosecutors say the executives put together two advisory services agreements in order to disguise Qatar’s demand for larger commission payments.
All four men have denied the charges. Prosecutors have not accused Qatar or Morrice of wrongdoing.
The trial, which is expected to last up to six months, continues.