Ex-Barclays CEO Varley at center of FSA probe: paper

LONDON Sun Sep 2, 2012 10:23am EDT

Former Chief Executive of Barclays Bank, John Varley, is driven away after a meeting with Britain's Chancellor George Osborne and Business Secretary Vince Cable, at the Treasury in London December 21, 2010. REUTERS/Andrew Winning

Former Chief Executive of Barclays Bank, John Varley, is driven away after a meeting with Britain's Chancellor George Osborne and Business Secretary Vince Cable, at the Treasury in London December 21, 2010.

Credit: Reuters/Andrew Winning

LONDON (Reuters) - John Varley, former chief executive of Barclays (BARC.L), is at the center of a regulatory inquiry into unorthodox payments to Qatar's sovereign wealth fund, according to a report in the Sunday Telegraph newspaper.

It said Varley was one of the four current or former executives whom the Financial Services Authority (FSA) is investigating over "advisory fees" paid by the bank to Qatar Holding in 2008.

The payments were linked to the sovereign wealth fund's participation in an 11 billion pound ($17.5 billion) refinancing of the British bank at the height of the financial crisis.

The probe is likely to reduce the chances of Varley becoming the new Governor of the Bank of England, a post with which he has been linked, the newspaper said.

An FSA spokesman declined to comment. A Barclays spokesman also declined to comment and did not have contact details to reach Varley. The Telegraph also said it had been unable to reach Varley.

Barclays confirmed last week the launch of a criminal probe into payments between Barclays and Qatar Holding. It said on Wednesday that the UK's Serious Fraud Office (SFO) had started an investigation into "payments under certain commercial agreements" between it and Qatar.

The FSA probe was already in place before last week and was revealed by Barclays on July 27. The FSA is investigating the bank and four current and former senior employees, including finance director Chris Lucas, on whether sufficient disclosures were made about the fees it paid in a 2008 capital raising.

(Reporting by Andrew Callus and Steve Slater. Editing by Jane Merriman)

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