A high-profile businesswoman has accused Barclays’ bosses of misleading her, shareholders and the market when negotiating investment deals during the 2008 global financial crisis.
Lawyers representing Amanda Staveley have told a High Court judge that bank bosses agreed to provide an unsecured £2 billion loan to Qatari investors.
They said the loan was “concealed” from the market, shareholders and from PCP Capital Partners, a private equity firm run by Ms Staveley.
PCP is suing the bank and wants £1.6 billion in damages.
Ms Staveley’s firm says it is owed money for the work it did setting up a Middle East investment deal for Barclays during the 2008 crisis.
Barclays says it will “vigorously” defend PCP’s claim.
A spokesman says bank bosses believe that the claim is “misconceived and without merit”.
Mr Justice Waksman began overseeing a trial at the High Court in London on Monday.
A barrister leading PCP’s legal team outlined the firm’s claim and made allegations against Barclays.
Joe Smouha QC told Mr Justice Waksman that the claims arose out of the recapitalisation of Barclays during the financial crisis in October and November 2008.
Mr Smouha said PCP had introduced a Middle Eastern investor, His Highness Sheikh Mansour bin Zayed Al Nahyan of Abu Dhabi, to Barclays and “subscribed” to invest £3.25 billion.
He said the only other “strategic investors” were the State of Qatar and its prime minister, Sheikh Hamad Bin Jassim Bin Jabr Al-Thani.
“The Qatari Investors (who were already shareholders in Barclays through an investment made in Barclays’ capital raising in June 2008) had agreed to invest a total of £2 billion,” said Mr Smouha in a written case outline given to the judge.
“However, PCP had been induced to invest on manifestly worse terms than the Qatari Investors.”
He said the Qatari Investors had demanded and, in order to obtain the investment, Barclays had agreed to pay: an additional fee of £280 million; a “yet further fee of £66 million” and to provide “an entirely unsecured loan” of £2 billion.
“Barclays deliberately misled not only PCP but also its own shareholders and the market in this regard,” said Mr Smouha.
“The £280 million fee was disguised as a fee for purported ‘advisory services’.
“In any event, the fact of that fee and the very short agreement concerning it was concealed from the market, shareholders and PCP.
“The £66 million fee was disguised by a false statement in a… market announcement concerning payment for introducing another investor.
“And, the (£2 billion) loan was likewise concealed from the market, shareholders and PCP.”
Jeffery Onions QC, who is leading Barclays’ legal team, said the underlying proposition that Barclays’ bosses chose to jeopardise their livelihoods and perpetuate a serious fraud was “highly improbable”.
“PCP received a fee of £30 million for its work assisting Abu Dhabi with that investment,” said Mr Onions in a written case outline given to the judge.
“It now claims that, but for the alleged deceit, it would instead have secured and completed a deal with Abu Dhabi which would have been worth up to £1.6 billion.”
Mr Onions said: “PCP’s case is that senior executives at Barclays of high standing and unblemished reputations chose in 2008 to jeopardise their livelihoods and to perpetrate a serious fraud on the markets by deliberately seeking to sign Barclays, a regulated FTSE 100 company with attendant high levels of internal and external scrutiny, up to sham agreements, under which hundreds of millions of pounds were to be paid, for nothing, over a number of years.
“As an underlying proposition, that is inherently highly improbable.”
He added: “Put bluntly, there was no need on either side to enter into sham agreements, and every reason to make the agreements real.”
The hearing, which is being shown online, is expected to last around two months.
In February, three former Barclays’ bosses were cleared of fraud over a £4 billion investment deal with Qatar at the height of the banking crisis.
The Serious Fraud Office had alleged that lucrative terms given to Qatar were hidden from the market and other investors through bogus advisory service agreements.
But Roger Jenkins, Thomas Kalaris, and Richard Boath, who are all in their 60s, were acquitted by jurors following a five-month trial at the Old Bailey.
The civil court trial, involving PCP, had been postponed several times to allow the criminal trial to proceed.
Ms Staveley has, in recent months, been involved in brokering a deal which could see a Saudi consortium take control of Premier League football club Newcastle United.