[Debate] Diamond hits back: how dare you suggest I misled inquiry

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  Diamond hits back: how dare you suggest I misled inquiry


      Anger £2m payoff as doubts about his evidence grow

James Moore <http://www.independent.co.uk/biography/james-moore> Author 
Biography , Oliver Wright 
<http://www.independent.co.uk/search/simple.do?destinationSectionUniqueName=search&publicationName=ind&pageLength=5&startDay=1&startMonth=1&startYear=2010&useSectionFilter=true&useHideArticle=true&searchString=byline_text:%28%22%20Oliver%20Wright%22%29&displaySearchString=%20Oliver%20Wright> 


Wednesday 11 July 2012

Bob Diamond, the former Barclays chief executive, set out to defend his 
reputation yesterday after being castigated by MPs for misleading 
Parliament.

Mr Diamond angrily rejected suggestions that he had been dishonest about 
regulators' concerns over activities at Barclays, calling the claims 
"totally unfair and unfounded". He had earlier been accused of giving 
"deliberately misleading" testimony to the Treasury Select Committee 
when it had questioned him over the Libor scandal last week.

The row came as it emerged that Barclays had been criticised by 
watchdogs for playing fast and loose with the rules just months before 
the scandal broke. Bob Diamond wrote: "Having watched the committee's 
session today I was dismayed that you and some of your fellow committee 
members appeared to suggest that I was less than candid with the 
committee last week.

"Any such suggestion would be totally unfair and unfounded."

As pressure grew on the former boss, Mr Diamond gave up £20m in bonuses 
he was due to receive, but will still receive £2m from Barclays.

An incendiary letter to Marcus Agius, chairman of Barclays, from Lord 
Turner, chairman of the Financial Services Authority, was made public to 
the committee with Mr Agius's appearance. In it Lord Turner accused the 
bank of:

* Seeking to gain advantage "through the use of complex structures ... 
which are at the aggressive end of interpretation of the relevant rules".

* Seeking to "spin its messages in a confusing and unhelpful manner" 
during financial stress tests last year.

* Using up "resources and goodwill" by continually arguing with 
watchdogs when rulings went against it.

* Draining trust away by its approach to issues including tax, 
regulation and accounting.

The letter came despite Mr Diamond's suggestion that relations with the 
FSA were good at a hearing of the select committee last week.

During the hearing with Mr Agius yesterday, MPs expressed fury over Mr 
Diamond's evidence last week. "It will look to us, and frankly it will 
look to everybody listening, like another example of a complete lack of 
candour to Parliament by the chief executive of Barclays," said the 
committee's chairman Andrew Tyrie, who accused Mr Diamond of a "cavalier 
attitude" towards Parliament.

However Mr Agius said he could not speak for Mr Diamond and repeated 
that view during a terse exchange with Labour's John Mann, who claimed 
Mr Diamond had "calculatedly and deliberately misled this parliamentary 
committee". Mr Mann added: "Mr Diamond has been misleading this 
committee, hasn't he?"

Speaking after the meeting, Mr Tyrie said Mr Agius's evidence had 
revealed Mr Diamond's testimony to be "implausible".

"Many of us thought that his replies were implausible, but didn't have 
evidence to support that hunch," he said. "We [have now] begun to 
collect quite a bit of evidence to suggest that Bob Diamond's 
presentation of what happened was quite a long way away from what really 
happened."

Mr Tyrie said the Committee would now consider the areas in which it 
believed it had been misled.

Mr Diamond, he said, would be given a chance to respond.

Mr Tyrie highlighted the letter, which he said did not tally with Mr 
Diamond's testimony. "It's clear from that letter that Bob Diamond's 
suggestion that the Financial Services Authority was broadly happy with 
what was going on in Barclays in February of this year ... simply 
doesn't tally with a reading of the letter."

John Mann, a Labour committee member went further and said Mr Diamond 
would have to be recalled.

"There's a constitutional issue here of whether we allow them to get 
away with it. I think we've got no choice [but to recall Mr Diamond]. 
Parliament's reputation is at stake."

The regulator's view of Barclays appeared to be endorsed by the 
corruption watchdog Transparency International, which rated Barclays 
among the least transparent companies in terms of their financial 
reporting. It came 71st out of 105 of the world's biggest publicly 
traded companies. That put it beneath PetroChina and level with Saudi 
Basic Industries.

The bonuses given up by Mr Diamond were "deferred" payments of shares 
for work he has already done. But he will still receive £2m, made up of 
a year's salary plus a payment in lieu of pension despite his 
contractual notice period being only six months.

Mr Agius said this was because Mr Agius had agreed to be "at the end of 
the phone" when required by Barclays bosses over the next year.

But critics argued that it was still too high. David Hillman, spokesman 
for the Robin Hood Tax campaign, said: "It exposes the financial 
sector's warped sense of entitlement that a seven-digit payoff for Bob 
Diamond's failure is seen as acceptable."

The Independent's reporting of the Barclays affair was referred to 
yesterday when the MP Mark Garnier asked Marcus Agius to respond to a 
whistleblower who told this newspaper that employees at the bank worked 
in a 'culture of fear'.

*Cameron's view: No apology required*

David Cameron does not believe George Osborne needs to apologise for 
suggesting that former Labour ministers were involved in the Barclays 
rate-fixing scandal, his aides said yesterday.

Labour is demanding the apology after the Bank of England's Deputy 
Governor, Paul Tucker, denied in evidence to Parliament that any 
minister or Whitehall official encouraged him to "lean on" Barclays to 
lower its submissions to the crucial Libor index.

Following his comments, Andrea Leadsom, a Conservative member of the 
Commons Treasury Committee which heard Mr Tucker's denial, said Mr 
Osborne had clearly made a mistake and should now apologise.

She said: "It was a very valid discussion at the time about who knew 
what and it has now been completely squashed by Paul Tucker."

But asked whether the Prime Minister agreed it was time for the 
Chancellor to say sorry, Mr Cameron's official spokesman said: "The 
Treasury has been making the position clear that he won't. He [Mr 
Cameron] agrees with the Treasury."

The Foreign Secretary, William Hague, also dismissed the demand, telling 
the BBC: "Parliament is a lively place and it should be, it's a free 
Parliament. The Chancellor said there are questions to answer, there 
remain questions to answer and I see no reason why he should apologise 
for that."

http://www.independent.co.uk/news/business/news/diamond-hits-back-how-dare-you-suggest-i-misled-inquiry-7932716.html

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