“Whilst significant parts of the two sets of proceedings do not overlap, it is clear that in both sets of proceedings what the FCA alleges was the primary/ substantial/true purpose of the June Agreement is not accepted by the respective Applicants. It is therefore likely that in due course the Tribunal will be called on to determine the nature and purpose of the June Agreement in the two separate sets of proceedings. The FCA considers it appropriate to flag this issue to the Tribunal now so that it can consider whether any particular steps should be taken to minimise the chance of inconsistent outcomes. In this regard the FCA has already written to Saranac to seek its views as to whether its reference should be determined at the same time as (but not joined with) the Barclays references. Saranac has indicated a strong preference that its reference is heard separately and before the Barclays references, as it considers its references would otherwise likely be unduly delayed. The FCA is neutral on this issue and is not seeking any directions in relation to it. Nevertheless we consider it appropriate that both the Tribunal, and all the relevant Applicants, are made aware of the overlap.”
“…there are ongoing, related, proceedings between Barclays and the FCA (in relation to the June 2008 capital raising, but also an October 2008 capital raising) for which a three-week substantive hearing is due to take place starting25 November 2025 [an error for 2024]. The Authority has ensured that Saranac and Barclays (as well as the Tribunal) are aware of this overlap and has provided appropriate cross-disclosure. Saranac’s position is that its reference should proceed and be determined separately from the references of Barclays {CB/270/4047}. The Authority does not object to this provided it is not necessary for the Tribunal to make findings in this case on matters that are directly in issue in the Barclays references, and which might therefore lead to inconsistent outcomes on critical points. The Authority considers that is likely to be possible because this reference focuses on whether the factual account that Mr Kalaris gave when interviewed was accurate and candid, not on whether the prospectus was properly compliant with the Listing Rules. However, depending on how the case develops it is a point that needs to be kept under review.”
“The regulator to which an application for approval is made under section 60 may grant the application only if— (a) it is satisfied that the person in respect of whom the application is made (“the candidate”) is a fit and proper person to perform the function to which the application relates…”
“[38] If, having reviewed all the evidence and the factors taken into account by the Authority in making its decision, and having made findings of fact in relation to that evidence and such other findings of law that are relevant, the Tribunal concludes that the decision to prohibit is one that is reasonably open to the Authority then the correct course is to dismiss the reference. [39] Alternatively, if the Tribunal is not satisfied that in the light of its findings that the decision is one that in all the circumstances is within the range of reasonable decisions open to the Authority, the correct course is to remit the matter with a direction to reconsider the decision in the light of those findings. For example, that course would also be necessary were the Tribunal to make findings of fact that were clearly at variance with the findings made by the Authority and which formed the basis of its decision. That course would also be necessary had there been a change of circumstance regarding the applicant which indicated that the original findings made on which the decision was based, for example as to his competence to undertake particular activities, had been overtaken by further developments, such as new evidence which clearly demonstrated the applicant’s proficiency in relation to the relevant matters. Such a course would not usurp the Authority’s role in making the overall assessment as to fitness and propriety but would ensure that it reconsidered its decision on a fully informed basis…”
“[34] …the Upper Tribunal must dismiss the Reference unless it makes findings of fact and/or law which lead to a conclusion that the Decision was not one that was reasonably open to the Authority. [35] Furthermore, even if the Tribunal finds flaws in the Authority’s decision-making process, for example by making findings of fact which contradict or are inconsistent with the findings on which the Authority based its decision, it should not remit the Reference if it is of the view that despite such failings, it is inevitable that if the matter were remitted, the Authority would come to the same conclusion.”
“On the basis of the facts and matters described below, the Authority is notsatisfied that Mr Kalaris is a fit and proper person to perform the controlledfunctions to which the Application relates. This is because there are reasonable grounds for considering that in interviews with the Authority in relation to two different investigations Mr Kalaris failed to be open and cooperative and gave untrue and misleading evidence. The Authority is therefore not satisfied as to his honesty and integrity.”
“I bear in mind the legislative framework within which the Tribunal operates and that it is the task of the Tribunal to decide whether the Applicant is a fit and proper person within the meaning of section 56 of the 2000 Act. The legislative framework includes section 133 and Rule 19(3) as a result of which the findings in Sphere Drake may be put before the Tribunal by the Authority as evidence and the Tribunal is free to make such use of those findings as is proper in the circumstances. However, the Tribunal will also have regard to any other evidence which is adduced before it, including any evidence of the Applicant or of witnesses on his behalf. For example, if the Applicant wishes to adduce evidence to support his contention that what he did was the normal practice of the market then he may do so. The Tribunal will also have regard to any argument put forward by either party.”
“The question is not whether anyone was in fact misled by Mr Kalaris…the question is whether Mr Kalaris gave honest answers and, for that purpose, the right thing to do is to read the transcript.”
“Mr Kalaris: …what we’re paying for is we’re paying for the advice and other things like that, right, so we can make that clear and separate... … I mean I guess the question when we actually go down this path, you know…we need to make sure that [Mark Harding] is comfortable … Mr Boath: …he might say it’s okay, right, because whatever we do, right, you know, will not be related to this subscription agreement, but frankly we all know that whatever we enter into we are entering into in exchange for the subscription agreement. So, you know, he’s got to get his head round it. Mr Kalaris: Yeah. Yeah that’s right. None of us wants to go to jailhere…”
“Mr Stanley: The advisory agreement was the means by which Qatar would receive the value that it wanted as a result of its investment, albeit by providing services under the agreement. Do you agree with that? Mr Kalaris: The Qataris had a view as to what they wanted to receive from the overall relationship with Barclays. That had two component parts to it. One was the participation at 1.5 per cent and the balance was the advisory service agreement. That provided the Qataris with the value that they wanted. The two were done in conjunction with each other. Mr Stanley: It was the means by which Qatar would receive the value it wanted, correct? Mr Kalaris: It was a means, yes. It was a legitimate means.”
“…my understanding [was] that the Qataris wanted additional value for their investment to that paid into the first capital raise, and that the bank if it wanted to proceedwould need to consider a legitimate way of transferring added value to them.”
“We are extremely pleased and honoured to be writing to you in connection with a new advisory agreement between our two institutions. You agree to provide various services to us, as an intermediary, in connection with the development of our business in the Middle East. You will provide these services over a period of 36 months to a total value of£42,000,000 [handwritten]. In return, we will pay you the sum of£42,000,000 [handwritten] in four equal instalments, the first within two weeks of signing, the second on1 October 2008 , the third on1 January 2009 and the last on1 April 2009 . We have discussed the type and scale of services you will provide to deliver value in exchange for this fee and we know this will need to be refined by mutual agreement as our relationship develops further. Both parties will monitor and review this arrangement and act in good faith in connection with the formulation and arrangement of the services to be provided. We are not creating a partnership or agency arrangement and neither party may make any commitment on behalf of the other without express instructions from the party intending to be bound. This letter and the arrangements contemplated by it will be governed by English law.”
“SMBC [Sumitomo Mitsui Banking Corporation] has agreed to subscribe for the Firm Placed Shares and Qatar Investment Authority, Challenger, China Development Bank, Temasek and the Further Placees have agreed to subscribe for the Open Offer Shares to the extent, other than in the case of China Development Bank’s Open Offer Entitlement, not taken up by Qualifying Shareholders. The Board believes that this is an important endorsement of Barclays longterm strategy and vision, and underscores the confidence of these institutions in Barclays and in its management team. Barclays is also pleased to have entered into an agreement for the provision of advisory services by Qatar Investment Authority to Barclays in the Middle East and to have agreed to explore opportunities for a co-operative business relationship with SMBC. The Board welcomes the support of Qatar Investment Authority, Challenger, SMBC, China Development Bank and Temasek as important investors while ensuring that the Open Offer structure allows existing Shareholders to participate in the issue of the Open Offer Shares on a pre-emptive basis.”
“Qatar Investment Authority Qatar Investment Authority was originally founded by the State of Qatar in 2005 to strengthen the country’s economy by diversifying into new asset classes. Building upon the heritage of investments dating back more than three decades, its growing portfolio of long-term strategic investments complement the State of Qatar’s wealth in natural resources. Qatar Investment Authority’s investment in Barclays is being made by its wholly owned subsidiary Qatar Holding, which was incorporated in April 2006 within the jurisdiction of Qatar Financial Centre as the prime vehicle for strategic and direct investments by the State of Qatar. Headquartered in the Qatar Financial Centre, Qatar Holding is structured to operate at the very highest levels of global investing, with a planned presence in all major capital markets. Barclays and Qatar Holding have entered into an agreement for the provision of advisory services by Qatar Holding to Barclays in the Middle East.”
“The following are all of the contracts (not being contracts entered into in the ordinary course of business) that have been entered into by members of the Group: (i) within the two years immediately preceding the date of this document which are, or may be, material to the Group; or (ii) at any time and contain obligations or entitlements which are, or may be, material to the Group as at the date of this document.”
“Qatar Subscription Agreement On25 June 2008 Barclays and Qatar Holding entered into a subscription agreement (the “Qatar Subscription Agreement”). The Qatar Subscription Agreement sets out the terms and conditions pursuant to which Barclays will, conditional only upon Admission, allot to Qatar Holding the Qatar Subscription Shares at the Issue Price of 282 pence per share. In consideration for agreeing to subscribe for the Qatar Subscription Shares, Barclays undertakes to pay Qatar Holding a commission equal to the product of 1.5 per cent. and the maximum number of Open Offer Shares for which Qatar Holding might be obliged to subscribe, being 625,426,689 New Ordinary Shares, at the Issue Price. The consideration for the allotment and issue of the Qatar Subscription Shares shall be the payment by Qatar Holding of an amount equal to the product of the Issue Price and the number of Qatar Subscription Shares. The Qatar Subscription Agreement contains customary warranties and undertakings.”
“The agreement, as executed, may well be regarded as uncommon or artificial or even perhaps reflective of a breach of fiduciary duty on the part of those who were involved in its production on Barclays’ side including, perhaps, Mr Varley who signed it. It might be regarded as a transaction at an undervalue. On any view the whole process looked ‘smelly’ or ‘dodgy’. But none of that meant that the parties each intended not to be bound by what they signed.”
“These circumstances arise in relation to announcements, a circular and prospectuses issued by Barclays plc and Barclays Bank pc in relation to capital raising exercises announced by Barclays plc on25 June 2008 and 31 October 200, and in relation to fees payable to Qatar Holding LLC under agreements dated25 June 2008 and31 October 2008 which may have related to the capital raising and which were not referred to in the announcements, a circular and prospectuses.”
“We are not dealing with stupid people reading prospectuses. They would have known, as is obvious, that Qatar was being paid for the provision of advisory services…”
“fees payable to Qatar Holding LLC under [the ASA] which may have related to the capital raising and which were not referred to in the announcements, a circular and prospectuses.”
“I don’t believe I have any understanding or knowledge of what the genesis was, nothing. Sorry let me rephrase that, if you take the continuum of the discussions over a period of a month about we’re going down two paths, one path is the capital raising and the other path is the strategic relationship. Now the capital raising dominated it, dominated the dialogue and maybe it’s 95% of it in the last 5% as a strategic relationship at the time perhaps, in terms of thinking, because the capital raising was more immediate, the strategicrelationship was more strategic. But fundamentally we were delighted, now I was delighted that we had a strategic relationship with the Qataris and weremoving to that because I felt that, as I said earlier I felt that our presence inthe Middle East was third rate. Our sponsorship from the Qataris, advice andfirst call in a way, was a tremendous advantage to have so I would have looked at, looked at this as a win for us that, this strategic relationship.”
“Mr Beauchamp: But you don’t, is this right, you don’t know the genesis of it, how it originated beyond the general time line? Mr Kalaris: No. We knew we won’t have [wanted?] a strategic relationship. I don’t know who put this first draft together frankly, I don’t know whether it was Roger or whether it was John’s office or whether it was the Qataris. A draft was shared with me and I don’t know the author…”
“…the idea about the genesis of this that I was trying to express at the time was that it was part of a longer term strategic positioning for the institution in the region and that I felt that that in and of itself made the advisory service arrangement, the ASA, legitimate and fit for purpose.”
“The genesis of the agreement comes from the desire to have a strategic relationship with the Qataris to the extent that it become—it is a mechanism of filling the value gap, that was evident and helpful, but it is - theabsolute starting point is, do we want to have this strategic relationship with the Qataris?”
“Well if you think about this, about the, a written commitment, a writtenagreement helps reinforce what is a friends and families, friends and familyrelationship so, as if, we would always hope that a shareholder would be, would have a commitment to doing more business with Barclays. A personal relationship helps that because it helps obviously in a dialogue and having a relationship that is committed and on paper, for advice, for sponsorship, forrelationship, for the entire relationship, further reinforces that. So that was the purpose of this, I, you know, I would have been, it’s, it’s, this sort of MOU is a very good way of extending the relationship and the sponsorship and the brand value of this to me was quite high”
“whilst the ASA also allowed Barclays to bridge the ‘value gap’ between the fees the Qataris wanted to be paid for their participation in the June Capital Raise compared to what Barclays would pay them, the purpose of the ASA was a commercial standalone arrangement for the provision of advisory services and for securing the long term strategic relationship with the Qataris.”
“would you have regarded the agreement as fit for purpose, I mean if that was the purpose does this fit that purpose?” and “so this [agreement] would be followed up with substantive work to take it forward?”
“Mr Beauchamp: Did you know how the fee was calculated? Mr Kalaris: I don’t, no. I can tell you how we think about these things commercially, I don’t know how this specific fee was calculated. Mr Beauchamp: Well, that would be helpful. Mr Kalaris: We’d look at what is the opportunity set in the region. We’d look – what is the opportunity. We look at whether our, what is our, what is our product. We’d look atfor the region. We look at what is our - how well are our competitors doing, we’d say what is a reasonable sum of money that we think we could return over time in this region and how much when you back that out, how much will you be willing to pay for it in the context of the, the region, the explosion in what was going on with oil prices at the time, the position and the promise of the Qataris, 40 million a year for that, for that sponsorship. I think the calculus would have been quite clean and simple.”
“Was there any connection between either the Agreement or the fees paid under it and the Qataris’ participation in the capital raising so far as you were aware at the time?”
“you are lying in that answer, aren’t you?”
“When dishonesty is in question the fact finding tribunal must first ascertain(subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”
“there simply is no motive established about why Mr Kalaris would betrying to pretend [the ASA and the capital raising] are coincidental events when they are obviously not.”
“BWA was largely brought together in the crucible of the Lehmans’ collapse, subsequent acquisition by Barclays and survival instinct of the financial crisis. Whilst these factors made initial integration efforts difficult, current BWA leadership have chosen the party line of ‘we didn’t know it was that bad’. In our opinion, the preponderance of documentary evidence and the corroborating anecdotal trends attests otherwise. The current leadership team, largely ‘Mitch’s Merrill team’ have pursued a course of ‘revenue at all costs’; taken a conscious decision to ignore support functions, reinforced a culture that is high risk and actively hostile to compliance, and ruled with an iron fist to remove any intervention from those who speak up in opposition. The culture is fragmented, built on the carcasses of cultures that were indifferent at best to these issues, and no positive culture change has taken place under his leadership. In its siloed state, BWA has not been influenced by positive culture from any of the other Barclays companies or regions. On this course, failure of the SEC exam was inevitable and further failures are also inevitable unless a concerted effort is made to change the broken culture at BWA and make the necessary investments. The issue now becomes two fold; how deep do you cut and how toquarantine the contagion?”
“Tom B[iesinger] is going to send the Culture report direct to Andrew [Tinney]’s house today so he has it over the weekend direct from him.”
“I thought you were sending to AT and bringing in hard copy Monday for both. (TK is travelling this weekend – Boston today, then NY, then London Monday morning). If you wish, perhaps you send a copy here for his attention and he can look through early Monday morning when he flies in.”
“Rachel stated TK would be in NY, see below. Is this the case or not. That’s why I was suggesting Courier to NY. Whatever the case I was wanting to ensure TK felt he also had an opportunity to see prior to meet.”
“Mr Stanley: It wouldn’t surprise you, would it, if you went off the handle about Gen Ven exceeding their remit? Mr Kalaris It wouldn’t surprise me, no.”
“…a Wealth cultural audit report, mandated earlier this year by Kalaris and prepared by an independent third party consultancy, is being withheld from Bar Cap and those on the internal SEC workstreams.”
“TK [Mr Kalaris] - I want to find out who the F WB [whistle-blower] is – there’s a certain style of writing and grammar in this email which is consistent in the other anonymous WB’s. I’m sure its that idiot [initials] – we should get investigators on to this. I want a search of the email system – I want the language/the grammar + the structure of writing/phraseology + writing style examined – there are ways to identify this F. I want to find him... AT [Mr Tinney] – there may be issues with that approach Tom but we’ll look into it. TK – was not happy AT ALL. AT – OK – I’ll talk to my IT guys + get back to you. DP – I tried to persuade TK not to – WBs are protected – could be a criminal offence under SOX [the Sarbanes-Oxley Act]. TK – note to AJ – make clear – its all complete bullshit – there’s no R[report] being suppressed + tell him that all these points have been seen beforehand addressed + we’re all over it.”
“Erin Hilgart provided a summary of her interviews in writing. Genesis Ventures provided verbal input by reference to their interview notes and working papers. There has never been a ‘Wealth Cultural Audit Report’.”
“Mike, this is incredibly concerning to me as we’ve been aggressively managing the entire issue with the SEC, including doing this cultural work well before it became de rigueur, but seem to be getting no credit for it. And where is the internal noise coming from? The purpose of what we did was to deal with any issues in an open constructive fashion. We had two sets of consultants, one who produced working papers rather than a report and one that did not. The Fed received a verbal update some time ago (Staff level)…”
“Mr Kalaris: And I did not know of the Genesis report until I came, until it was shown to me by Antony and Mark Harding two weeks later, some... Ms Yazdani: Yes Mr Kalaris: Whenever the – whenever it kind of came by, 17th, 20th, one of those days. Ms Yazdani: Okay. So if I can use this expression, when were you broughtover the wall on this issue? Mr Kalaris: So if I have the date right – I think its 17thof December…[it was a] nine o’clock meeting. They showed me the – I think it was a blue deck and said ‘Have you seen this before?’ and I said ‘No. And that was thefirst time I was aware of – that there was a Genesis report.”
“It would have been that. I wouldn’t have asked for a whole lot more necessarily because I knew I was going to meet the guys.”
“Ms Yazdani: Did he explain why it was going to be a difficult conversation? Mr Kalaris: I don’t recall him specifically saying why. Ms Yazdani: He said it was going to be ugly but you didn’t ask. Is that your recollection, you didn’t ask him why it would be ugly? Mr Kalaris: I believe although I can’t recall the specific conversation that I would have been given and had a heads up that it was going to ugly, difficult…I definitely don’t recall going into any detail and I was not given any specific detail until I actually heard the explanation by Tom [Biesinger] or Ross [Wall]. … Mr Trivedi: In the context of an SEC that’s interested in this workstream and Andrew saying “this is going to be ugly”…I find it interesting to know that you didn’t just ask him why. Mr Kalaris: …I’ll just repeat what I said… Mr Sparrow (of Ashurst): …Did Andrew, when he gave you the heads up, do you remember him giving you any indication that he’d had a report or that he knew the detail of what Genesis Ventures had concluded? Mr Kalaris: No.”
“I knew we had made a promise -- I had made a promise to the Fed in terms of us addressing these issues and I wanted to be in a position where I coulddeliver against those.”
“it never struck me to think about it – I wouldn’t have been paying a whole lot of attention to where it came from. I would have taken it as the set of conclusions or specific points that were being made as part of a briefing.”
“Ms Yazdani: How did Mr Tinney described Genesis Ventures’ outputat this meeting? Mr Kalaris: The only thing I do recall is that he was clear that there was not a report. I don’t recallhow he described or if he described anything otherthan that detail.”
“Ms Yazdani: You forwarded it [the email from Mr Roemer] on… Mr Kalaris: Yes, I did, yes. Ms Yazdani: …to him without any comment. Mr Kalaris: Yes, Ms Yazdani: So I am just wondering if you talked about it. Mr Kalaris: …I had a conversation with [Mr Tinney]…where he said to me that he had what he called, received working papers or he had working papers and he said that he’d received them. And that was the only conversation I had with him about this. Ms Yazdani: How did the working papers come up in conversation, what was the context? Mr Kalaris: He told me. Ms Yazdani: As in, just out of the blue or you… Mr Kalaris: It was in – as part of like a “what’s going on here” question. And that was the first time I was aware that there were even working papers, that he had something…. Ms Yazdani: Did he say how he came by the notes?... Mr Kalaris: No. No, I don’t recall that at all.”
“Mr Tinney called me, and I asked him if he knew what was going on and he told me that he had previously received something to his home address from GenVen, in the form of ‘working papers’ and that he was going to share these with Mr Jonathan Peddie (who was the Group legal officer in charge of investigating the Whistleblowing Email at that time).”
“In our view it is clear that in this context ‘the matter’ in question is whether the Authority can be satisfied that if the Variation Application were approved Dr Köksal would satisfy the Threshold Conditions [for authorisation]. Consequently, the extent of what the Tribunal may examine in considering the matter referred will be prescribed by the issues raised in the pleadings and the evidence sought to be adduced to support the competing contentions made by the parties in those pleadings.”
“[33] In our view there is nothing in principle that would prevent us taking into account the further information provided by Dr Köksal since the giving of the Decision Notice in coming to a decision as to whether or not to remit the matter back to the Authority in the light of the findings that we make in relation to that evidence. In our view to take this course is entirely consistent with the wording of both s 55Z3 (1) and s 133 20 (4) FSMA. It is also consistent with the approach taken by this Tribunal in the case of Stephen Robert Allen v The Financial Services Authority (2013) FS/2012/0019 where the Authority sought to substitute new and distinct allegations which it contended established that Mr Allen was not a fit and proper person from those originally contained in its decision notice. The Tribunal said this at [19] of its decision: “The allegation in the Decision Notice was that Mr Allen is not a fit and proper person to perform any function in relation to regulated activities generally because he lacks honesty and integrity. Any evidence that relates to Mr Allen’s honesty and integrity, whether or not it was available to the Authority at the time of the Decision Notice, may be considered by the Upper Tribunal.” [34] Although this decision pre-dates the coming into force of s 133 (6) and (6A) FSMA, we see nothing in the new provisions which would affect it. [35] We are therefore of the view that if we were to make findings of fact in relation to the new evidence provided by Dr Köksal which indicated that the original findings made on which the decision was based had been overtaken by further developments, such as new evidence which clearly demonstrated that in substance the further information requested by the Authority in relation to the Application had in fact now been provided, then that finding could lead the Tribunal to conclude that the matter should be remitted to the Authority for further consideration in the light of those findings. This would ensure that the Authority reconsidered its decision on a fully informed basis.” “The allegation in the Decision Notice was that Mr Allen is not a fit and proper person to perform any function in relation to regulated activities generally because he lacks honesty and integrity. Any evidence that relates to Mr Allen’s honesty and integrity, whether or not it was available to the Authority at the time of the Decision Notice, may be considered by the Upper Tribunal.”
“Mr Kalaris was very definite in his views that the pricing of subsequent capital raises from investors should be absolutely fair to those investors, having regard to the progress being made by the Firm in implementing its business plan.”
“When Abrdn indicated its willingness to consider an investment, I recall the professionalism, fairness and transparency of the documentation relating to the business constitution, shareholder agreement and shareholder protections.”
“When I agreed to join the Board, initially as an investor representative, I was heartened by the quality and broad experience of the Board of Directors Tom had assembled, his desire for strong governance and challenge and his utmost respect for the regulatory environment in which the business would operate. Recruitment, customer proposition and the operating environment reflected Tom’s belief [that] clients would expect, as a minimum, strong business ethics, adherence to regulatory discipline, service excellence and a best-in-class operating environment to protect the assets which they were entrusting to the stewardship of Saranac.”
“Well, I don’t think that actually was the correct answer at the time. I’m sorry that I got that wrong. I made a mistake. I wouldn’t do that again.”