Senior Barclays executives warned each other that "dodgy" to pay the Prime Minister of Qatar's millions for "advisory services," a court has heard.
They were worried about the law and they were blamed for the arrangement.
But audio recordings played to the court.
Roger Jenkins, Tom Kalaris and Richard Boath are on trial at the Old Bailey.
They are accused of fraud and conspiracy to commit fraud.
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On Friday the court heard phone calls from June 2008, when Barclays was looking for pounds of extra capital to boost its weak finances.
The then Prime Minister of Qatar, Sheikh Hamad al-Thani, indicated to Roger Jenkins he was prepared to invest £ 2bn.
But the Qatari investors wanted a commission for doing so of 3.25% – more than double the 1.5% commission other investors were getting.
Barclays arranged to pay the Qatari investors an "additional fee" of 1.75% – or £ 35m – for 'advisory services'.
Roger Jenkins negotiates the deal with Bob Diamond, then deputy chief executive, according to transcripts of phone calls read out in court.
"Mr Jenkins was quoted telling Mr Boath in 2008." The night of June 11, I had a conversation with Sheikh Hamad, exploring the advisory agreement. "
The Serious Fraud Office's case is that the advisory services agreement was fraudulent because it was in fact simply a mechanism to pay the Qataris' additional fees.
'A bit tricky'
Mr Kalaris told Mr Boath the scheme had been approved by then-chief executive Bob Diamond and finance director Chris Lucas, and so by compliance director Steve Morse.
The Prime Minister of Qatar was an adviser to Barclays.
Mr Boath and Mr Jenkins told Sheikh Hamad he had to disclose his beneficial ownership of the vehicles used to invest the money.
"He is the prime minister," Mr Boath told Mr Jenkins in a phone call on 18 June 2008. "So he's getting paid to provide us with advisory services is a bit tricky".
"Actually that's true," Mr Jenkins replied. "I do not know what to do with this … But he wants his money".
Richard Boath suggested a legitimate solution:
You know what I think the best thing to do is … we basically start again … the Chinese come in, everybody comes in, we disclose 3% fees …. none of us is going to jail and we get a deal done on Tuesday. "
Jenkins: Fine, but let's deal with the real … what we've got. "
In court, Ed Brown QC, prosecuting, said: "You may well think he was beginning to say 'reality'.
Later in the same call, Mr. Jenkins returned to the same point:
"… given his position of Prime Minister and Foreign Minister -"
Richard Boath: "It's a bit dodgy."
Roger Jenkins: "It's a bit dodgy.
Judith Shepherd and Matthew Dobson who had him to provide "valuable services" in exchange for the Barclays' money.
Matthew Dobson: "And it's just beyond Roger, it's the board actually, because you know this is all part of the –
Richard Boath: "Are we going to have time to demonstrate that they have provided these services?"
Judith Shepherd: "If anybody challenges us."
Mr. Boath: "Like any, any of the other investors?"
Ms Shepherd: "Any of the other investors, the FSA, the UKLA, the criminal authority, the fraud unit."
Mr Boath: "I'm feeling sick." There's no need to use all those words to make me feel sick. "
Ms Shepherd: "Well, I have not finished my list yet."
Mr. Boath: "Right …"
Ms Shepherd: "It's serious stuff;
Mr Boath: "No … well, if it were me, that's it. But there you go … So, all right."
Ms. Shepherd: "Well, Big Dog [Roger Jenkins] want to be in the dock first. "
Mr. Boath: "Otherwise known as the 'Dodger' so maybe he even dodge that one … By the way, are the boards going to see this agreement?"
Ms. Shepherd: "Of course they are."
Mr Dobson: "It's their necks on the block."
The trial continues.