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Rake losing City confidence? - FT
Posted: 11 July 2012
July 10, 2012 8:27 pm
Calls for outsiders to take Barclays helm
The calls undermine plans for Sir Michael Rake, now deputy chairman, to succeed the outgoing Marcus Agius, who came under intense questioning over the affair at Parliament's Treasury select committee.
Three top 10 investors told the Financial Times that it would be unacceptable for the chairman to be an internal appointment. “We have been quite clear with [the board] that we’d like to see an external appointment as chairman,” said one. “They need someone who is independent of anything that’s gone before.”
A fourth leading shareholder said: “It has to be external candidates for both chief executive and chairman. It is not a banking problem, it is a cultural problem at Barclays.”
Mr Agius told the TSC that Bob Diamond would receive a £2m cash pay-off following his resignation last week as the bank’s chief executive.
He said Mr Diamond had “voluntarily” agreed to forgo prior-year deferred awards worth up to £20m, though performance conditions meant he was unlikely ever to have received the full amount.
On Tuesday a spokesman for the prime minister said Barclays’ decision to forgo Mr Diamond’s bonus was a sign that the bank “understands public concern and that they understand there’s a need for a change of culture in banking”.
Mr Agius’s evidence, during which he confirmed direct pressure from Bank of England governor Sir Mervyn King to oust Mr Diamond, conflicted in several areas with testimony given last week by the former chief executive, prompting accusations from the committee that he had misled parliament.
One member of the committee, which is inquiring into the fiddling of Libor rates, called for Mr Diamond to be recalled. “Diamond’s evidence is not worth the transcript it was written on,” John Mann tweeted. “We now know Diamond misled parliament and he should be recalled.”
Mr Agius and Mr Diamond resigned after Barclays incurred a record £290m fine when US and UK regulators found that traders had manipulated the bank’s submissions to Libor, a key measure of banks’ strength and the basis for $360tn of financial products.
Regulators across the globe probe alleged manipulation by US and European banks of the London interbank offered rate and other key benchmark lending rates
The committee heard evidence of a collapse in the relationship between Barclays and regulators, evidenced by a letter sent by Lord Turner, chairman of the FSA, to Mr Agius in April warning of Barclays’ “unhelpful” and “aggressive” behaviour.
MPs grilled Mr Agius about the culture he presided over and focused on whether he had passed on these concerns to Mr Diamond. Mr Agius said he had held lengthy discussions with his chief executive about the letter from Lord Turner.
But in his own evidence last week, Mr Diamond denied knowing that the FSA was concerned. MPs said Mr Diamond had shown a “cavalier attitude” to their committee and treated it with contempt.
Last night Mr Diamond wrote to Mr Tyrie, saying he was “dismayed” by the suggestions he was not candid in his testimony and the “terribly unfair impact on my reputation” the accusation had caused. He offered to “discuss the issue further” with Mr Tyrie.
One person close to the Barclays board said “some but not all” investors who had expressed an opinion had called for an external appointment, adding that Sir John Sunderland, the board member who is leading the search, would canvas opinion both internally and externally.
Two people familiar with the process said investors had informally approached Lord Davies, the former chairman of Standard Chartered, to sound out his interest, though he is understood to have ruled himself out.
The preference for an external appointment could conflict with regulators, who may be keen to see a swifter replacement of leadership at Barclays than would be possible if both chairman and chief executive come from outside the bank.