Amanda Staveley v Barclays: a financial defeat but a PR victory
When Roger Jenkins hotfooted it out of one crunch meeting in his Mayfair home in the autumn of 2008 – and straight round the corner to another at the Dorchester hotel – Barclays’ then chairman of investment banking could hardly have imagined that the minutiae of those encounters would linger in anybody’s memory for long.
The purpose and potential consequences of the meetings could not have appeared more simple and pressing, as the financial world was in a midst of genuine crisis that had just caused the collapse of Lehman Brothers on Wall Street.
Either Jenkins’ efforts would help secure emergency funding to save Barclays and allow him and his colleagues to get back to the business of making money. Or his sales patter would fail and the bank – plus the £39m annual pay and bonuses he had enjoyed for the previous three years – were history.
But, in the end, reality proved less binary.
Barclays was saved when £6.5bn of emergency funding was secured from the parties being represented at the two meetings with Jenkins – Abu Dhabi in the guise of the high-profile financier Amanda Staveley and Qatar by Sheikh bin Jassim bin Jaber al-Thani, the chairman of Qatar Holdings – but the circumstances of the deals gave rise to one of the larger legal claims in recent City memory.
The businesswoman alleged that better, secret, terms were offered to the Qataris, and that Jenkins, whose nickname at the bank was “Big Dog”, had deceived her by promising that Abu Dhabi was getting the “same deal”.
That deception had cost Staveley hundreds of millions of pounds, she claimed, as it meant her company PCP Capital Partners eventually had to pull out of the deal as a principal and settle for just £30m in gross advisory fees.
Certainly such a huge legal claim raised eyebrows, both outside and inside the Square Mile, with Barclays describing the damages case as “opportunistic and speculative” and suggesting Staveley had exaggerated the level of her contacts in the Gulf and the importance of her role in the Barclays deal.
The bank was proved partly correct.
On Friday, Mr Justice David Waksman ruled Staveley had indeed been deceived by Jenkins as she claimed – and that “for the most part, her evidence was reliable” – but if that part of his judgment reads like a public relations victory, the meat of it is a resounding financial defeat for Staveley.
Crucially, the judge concluded that Staveley had suffered no loss because she would never have been able to raise enough debt finance to complete the deal as a principal. Staveley has said she is considering an appeal.
Waksman said: “There was no real chance of such finance being obtained by PCP, or anything like it … Accordingly, PCP is not entitled to any of the damages it sought by reference to its primary claim. I also rejected its secondary claim to the effect that [an alternative deal would have been struck], with an estimated value according to PCP of some £365m. This meant that PCP’s claim as a whole must fail.”
However, he added: “Not only were the ‘same deal’ … representations [by Jenkins to Staveley] false but they had been made by Mr Jenkins knowing that they were false, in other words he knew that [Staveley’s businesses] were not getting the same deal as the Qatari interests.”
He added: “Mr Jenkins’ dishonesty was in reality always present from 23 October [the date of his meetings with Staveley and Hamad]. It did not really change once the fees had morphed into [different deals] because both were (at the very least) still part of the effective purchase price payable to the Qataris. The same goes for the [£2bn loan given by Barclays to Qatar at the time of the deal] … At no point did Mr Jenkins tell Ms Staveley that the position had changed … That in itself was dishonest.”
If the judgment represents simultaneously a financial defeat and a qualified PR triumph for Staveley, the reverse is true for Barclays.