(Bloomberg) -- Former Barclays Plc wealth head Tom Kalaris failed to gain approval to hold a senior position in UK finance after a London court declared that he’d acted dishonestly when quizzed about the bank’s controversial capital raising with Qatar.
Kalaris, who was facing scrutiny over his role in the injection of funds at the height of the 2008 financial crisis, has been trying to move on with a new wealth management venture after he was acquitted of fraud. He’d sought approval to be chief executive officer of Saranac Partners only to be blocked by the Financial Conduct Authority.
On Tuesday, a UK court sided with the watchdog, saying that Kalaris couldn’t be considered fit and proper to lead the firm. The judges said Kalaris answered the FCA’s investigators in a way that served as a “smokescreen and distraction,” and at other moments gave responses that were misleading, half truths, or dishonest.
The investigation related to the bank’s desperate attempts to avoid nationalization, a fate imposed on two competitors as the financial crisis tore into balance sheets in 2008. Faced with diminishing capital reserves, executives turned to the gas-rich Gulf nation of Qatar for investment. The bank avoided a government bailout, but the deal has been a legal headache ever since.
The FCA interview focused on the advisory services agreement — a deal in which Barclays would pay the Qataris for strategic advice and introductions in the Middle East — that was tied to the June 2008 fundraising.
The regulator is separately pursuing a £50 million ($66.1 million) fine against Barclays for failing to disclose the arrangements with Qatar. The bank is appealing the penalty and is set to argue its case at a full London trial at the end of the year.
Kalaris founded Saranac — named after a New York lake where he once lived — in 2015. Before it’s authorization, he invested more than £20 million in the business, according to the judgment.
While Saranac had certified Kalaris as fit to act as a client adviser in 2020, it needed the FCA’s approval before he could act as chief executive. The FCA refused the permission in 2022.
“We are disappointed by the findings of the Upper Tribunal but accept its decision,” Saranac said in an emailed statement. “The matters at issues pre-date the establishment” of the firm, it said. “The tribunal made no criticism of Saranac Partners nor its activities.”
The firm itself had assessed Kalaris as “fit and proper” and pointed to the “standing and reputation” of its non-executive directors. Saranac said it oversaw some £5 billion of assets.
The firm, which has addresses in London and Madrid, counts Martin Gilbert, the former head of what is now Abdrn Plc, among its non-executive directors.
(Updates with further detail on the FCA interview in the fifth paragraph.)
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