How Amanda Staveley took on Barclays over its 2008 Qatar rescue – The Guardian

It’s June 2008 and the beginning of the monetary disaster. Everybody within the Metropolis of London is firefighting, however two bankers are wrestling with an particularly thorny drawback.

They’re inside touching distance of saving their financial institution from oblivion, but a single sticking level stays: how do they settle for the rescue deal on provide from the Gulf state of Qatar, whereas concurrently maintaining themselves out of jail?

This concern was sufficiently stay within the minds of Thomas Kalaris and Richard Boath – then two of probably the most senior executives at Barclays – for the pair to have interaction in gallows humour concerning the prospect.

In a now notorious phone alternate between them, Kalaris stated: “None of us wish to go to jail right here … [because] the meals sucks and the intercourse is worse.”

Twelve years later and that quandary has primarily proved the set off for one of many bigger authorized claims in latest Metropolis reminiscence, which opened on the excessive courtroom final week.

Amanda Staveley, the high-profile businesswoman who has simply brokered the potential takeover of the Premier League soccer membership Newcastle United, is suing Barclays for as much as £1.5bn after her consumer, Sheikh Mansour bin Zayed Al Nahyan of Abu Dhabi, invested £3.25bn as a part of a subsequent emergency fundraising throughout 2008.

Earlier than Staveley had even arrived on the Barclays scene, the issue dealing with Kalaris and Boath was that the potential Qatari buyers have been demanding the financial institution pay them thousands and thousands of kilos in charges in an effort to make investments, courtroom paperwork allege. However Barclays’ industrial attorneys insisted that these charges couldn’t be a pure inducement. They needed to be paid in return for industrial worth.

The answer was a deal that primarily meant that the Qataris would earn their charges by making introductions and giving recommendation. After weeks of negotiation, an settlement was struck and Barclays was saved – no less than for a number of months.

At that very second, Staveley had simply began constructing what was to change into – no less than within the public’s notion – a formidable status as a monetary fixer who had the cell phone numbers of Emiratis on pace dial.

Her enterprise profession had began by buying a restaurant close to Newmarket, the place she acquired to know a number of the fabulously rich Gulf racing set, and by September 2008 the then 35-year-old had simply suggested on the sale of Manchester Metropolis by Thaksin Shinawatra, the previous prime minister of Thailand. The customer was an outdated contact of hers from a stint working in finance within the Center East: Sheikh Mansour.

That month the Wall Avenue funding financial institution Lehman Brothers collapsed, triggering the following stage within the credit score crunch. Barclays was once more within the place of needing to boost billions to maintain it from being nationalised.

Staveley and Mansour have been concerned with investing. The Qataris have been too, solely this time they have been demanding greater than £300m in charges.

On 23 October Staveley met Barclays’ then chairman of funding banking, Roger Jenkins, at his house on Farm Avenue in Mayfair, London. No sooner had the assembly completed, he rushed across the nook to satisfy Qatar’s Sheikh Hamad on the Dorchester resort in what turned a frantic sprint to boost the funds.

By November a deal was executed. Solely then, everyone fell out.

In line with Staveley’s proof, when she met Jenkins at his house in October he had promised her and Abu Dhabi the “similar deal” because the Qataris for an funding in Barclays. And but, Staveley claims, unbeknown to her the Qataris have been additionally being paid tons of of thousands and thousands of kilos in charges.

Staveley alleges in courtroom paperwork that in an effort to safe the rescue finance, Barclays agreed to Qatari calls for to be paid an extra “sham” advisory payment of £280m; a “but additional payment of £66m”; and “a completely unsecured mortgage” of £2bn – “nearly precisely the identical sum as that for which they have been providing” to speculate. The telephone calls and transcripts of the bankers joking about going to jail are proof they have been making an attempt to disguise these funds, she claims.

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Staveley’s case is that she sacrificed the prospect of future profitable monetary derivatives that have been a part of her unique deal, in an effort to conform to what she thought was the identical deal because the Qataris. This later prompted her to be sidelined as an investor by Abu Dhabi, and meant she has solely been capable of acquire £30m in gross advisory charges.

Attorneys representing Barclays have described the damages declare as “opportunistic and speculative” and, as she entered the witness field this week, instructed Staveley had exaggerated the extent of her contacts within the Gulf and the significance of her position within the Barclays deal.

Barclays argues the charges paid to Qatar have been real industrial preparations, whereas a prison case centring on these “sham” payment allegations resulted in Jenkins, Boath and Kalaris all being cleared of fraud in February.

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