Brocker.Org: Barclays CEO Jes Staley has angered one of the world’s biggest investment firms

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Jes
Staley speaks during a panel discussion at the Institute of
International Finance (IIF) annual meeting in Washington
September 25, 2011.

Reuters

LONDON – Barclays CEO Jes Staley angered KKR, one of the world’s
biggest investing firms and a client of the bank, after
backing his brother-in-law in a legal dispute against them,

according to reports.

KKR is suing Jorge Nitzan, the brother of Staley’s wife, over a
soured deal in Brazil that cost the company around $475 million
(£367.7 million),
according to the WSJ, which first reported the story.

Nitzan and Staley’s wife sold their stakes in Brazilian tech firm
Aceco to KKR in 2014, in a deal valuing the company at $700
million.

KKR has since written the value of its stake to zero, and fired
Nitzan as CEO of Aceco, after an internal fraud and bribery
investigation. The company is pursuing Nitzan in the Brazilian
courts. 

According to the media reports, KKR asked Staley to act as a
go-between in the dispute with the hope of  getting
Nitzan to settle and avoid a complex legal battle. Staley refused
and introduced Nitzan to another investor with the aim of
helping him regain control of the company. 

A spokesman for the bank said: “Barclays has not been involved in
the issues or transactions at the centre of this commercial
dispute. However, appropriate senior personnel within Barclays
have been kept informed about this matter and in particular
regarding any management interactions with the parties
concerned.”

A KKR spokeswoman told The Times: “We have a responsibility to
protect the interests of our investors who we believe were
defrauded in the sale of Aceco.”


The Guardian reported that KKR
was angry at Staley’s refusal
to help settle the dispute and has left the bank out of pitches
for work on future deals. The FT reported that
Barclays has made $190 million in fees from KKR since 2010.

The case has come at a sensitive time for Staley, who last
month apologised for trying to unmask the identity of a
whistleblower who had written two anonymous letters about the
conduct of a senior executive that Staley had hired.

Both Jes Staley and Barclays are the subject of investigations by
the UK’s Financial Conduct Authority and Prudential Regulation
Authority over the affair, which is being treated as
a whistleblowing incident.

Staley said in a statement: “I have apologised to the
Barclays Board, and accepted its conclusion that my personal
actions in this matter were errors on my part. I will also accept
whatever sanction it deems appropriate.”

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