LONDON – British buinesswoman Amanda Staveley’s private equity firm told London’s High Court on Monday it had received a “substantially worse” deal than Qatar when its syndicate invested billions of pounds in Barclays (BARC.L) during the financial crisis in 2008.
Claiming damages of up to 1.5 billion pounds ($1.9 billion) for alleged deceit, a lawyer for Staveley’s PCP Capital Partners alleged Barclays had reneged on written and oral representations that PCP’s syndicate would get the same terms as Qatar.
The civil case hinges on the terms Barclays offered Qatar and PCP’s syndicate, which included Abu Dhabi investors, for taking part in a 7.3 billion pound cash call in October 2008 that allowed the British bank to avoid a state bailout.
Barclays has dismissed the case as misconceived. It argues that an eight-year Serious Fraud Office inquiry into whether side deals, called advisory service agreements (ASAs), struck with Qatar in 2008 had been undisclosed fees had culminated in blanket acquittals.
PCP alleges Barclays paid Qatar 346 million pounds in extra fees as well as agreeing to a $3 billion loan for the Gulf nation in November 2008 that at the date of drawdown almost exactly matched the amount Qatar was investing.
“In fact, the deal that the Qataris got was very substantially better and PCP’s deal very substantially worse,” lawyer Joe Smouha told the court as he opened the case for PCP.
PCP, whose syndicate invested about 3.25 billion pounds in Barclays in 2008, was paid 30 million pounds in April 2009 for its work on the transaction.
The high-profile trial, one of the last legal clashes in Britain to revolve around the 2008 crisis, is expected to hear nine weeks of evidence and call former Barclays CEO John Varley and one-time senior rainmaker Roger Jenkins.
Staveley is due to give evidence later this week.
The case has come to court four months after Jenkins and two other former Barclays executives were acquitted of fraud in the criminal case brought by the SFO over two 2008 fundraisings. Varley was acquitted last year.
The defendants argued that June and October ASAs had been cleared by senior directors and lawyers and were intended to open up lucrative business opportunities in the Middle East.
Qatar has said its investment in Barclays created a strategic partnership and was part of a plan to build a global financial portfolio and that the ASAs were genuine.