Former Barclays boss says he feared Government ownership during 2008 crisis
John Varley told a judge he feared for the bank’s strategic direction and thought shareholders’ interests could be harmed.
Former Barclays chief executive John Varley has told a High Court judge why he wanted to avoid the bank going into Government ownership during the 2008 financial crisis.
Mr Varley, group chief executive from late 2004 to late 2010, told Mr Justice Waksman he feared the impact on the bank’s strategic direction and said Government ownership would have damaged the interests of shareholders.
He was giving evidence at a High Court trial in London on Thursday after Barclays became embroiled in a £1.6 billion battle with a businesswoman.
Amanda Staveley has made complaints about the behaviour of Barclays bosses when negotiating investment deals during the 2008 crisis.
She says Barclays agreed to provide an unsecured £2 billion loan to Qatari investors, but claims the loan was “concealed” from the market, shareholders and PCP Capital Partners, a private equity firm she runs.
PCP is suing the bank and wants £1.6 billion in damages.
Barclays disputes PCP’s claim and says it is made “of sand”.
Mr Varley said the world looked “very difficult” and “very dangerous” at the time, and the prospect of Government ownership was “unattractive”.
“I feared for the consequences of our strategic direction if we became part-owned by the Government,” he told the trial.
“I thought it would be very damaging to the interests of shareholders.”
He said Government ownership would have probably put jobs at risk and affected the bank’s ability to pay bonuses to employees.
Mr Varley said that would have damaged the retention and recruitment of staff.
Mr Justice Waksman, who began overseeing the trial on June 8, has already heard evidence from Ms Staveley and witnesses called by PCP.
Ms Staveley, who in recent months has been involved in brokering a deal which could see a Saudi consortium take control of Newcastle United, says PCP introduced Manchester City owner Sheikh Mansour to Barclays and he “subscribed” to invest £3.25 billion.
She says PCP is owed money for the work it did.
