The former chief executive of Barclays has been acquitted of charges that he paid secret fees to Qatar to help the bank to avoid a government bailout.
The decision that there was insufficient evidence against John Varley, after a high-profile fraud trial, marks a failure of the only attempt in Britain to prosecute a senior banker for the mistakes of the financial crisis.
Mr Varley, 63, was acquitted on two charges of fraud over fundraisings in 2008, in which Barclays tried to raise money from investors around the world to remain in private ownership. Royal Bank of Scotland and Lloyds, its rival British banks, had to take huge cash injections from the government, leaving them with large taxpayer-controlled holdings.
Mr Varley was prosecuted by the Serious Fraud Office after a five-year inquiry that required millions of pounds of extra funds from the Treasury. He was found to have no case to answer owing to insufficient evidence. The Court of Appeal yesterday dismissed a challenge by the SFO over a previous ruling in his favour. That trial ended in April when a jury was discharged.
The court has allowed a retrial of three of Mr Varley’s colleagues to go ahead. They will face claims that they paid fees of £322 million to Qatar alongside its investment, supposedly for services that the Gulf state would provide to the bank, such as introducing it to new clients in the region.
The SFO alleges that the fees were inducements to persuade the Qataris to invest and were not properly disclosed to the market or other investors. The three are Roger Jenkins, 63, who was the head of Barclays’ business in the Middle East, Tom Kalaris, 63, former head of the wealth division, and Richard Boath, 61, a senior investment banker.
Barclays raised capital twice in 2008, leading to a total investment of £6.1 billion by Qatar in the bank. Mr Boath, of Henley-on-Thames, Mr Jenkins, who lives in Malibu, California, and Mr Kalaris, of southwest London, are charged with conspiracy to commit fraud by false representation in relation to the June 2008 fundraising. Mr Jenkins faces an additional charge over a second capital-raising in October 2008. Mr Varley also had been charged over the June and October fundraisings. All four have denied the charges.
The Court of Appeal’s order said: “Following an application by Mr Varley . . . the trial judge ruled that the evidence against him on each count was insufficient for the case to proceed. That ruling was appealed by the prosecution. That appeal was dismissed by the Court of Appeal.
“Accordingly Mr Varley has been acquitted on both counts. The other defendants will be retried at a date to be determined.”
The case has been seen as a test of the SFO. The Court of Appeal’s decision to allow a retrial of three former Barclays staff will allow it to salvage some credibility.
Mr Varley, who was educated at Oxford, stood down as chief executive of Barclays in 2011, having worked there for almost 30 years. Since leaving he has kept a low profile.