Barclays Plc (BARC) bought Tricorona AB in 2010 to build its position as a key player in the $78 billion global market for carbon credits. A former Barclays’s client told a London court it had the same idea two years earlier.
CF Partners, the former client, said on the first day of a trial today that it hired Barclays to advise it on a possible bid, only to have the bank buy Tricorona. A lawyer for the company, which is seeking about 82 million euros ($105 million), said Barclays abused its role as an adviser.
“There was a wholesale disregard by certain key Barclays employees for those Chinese wall rules and procedures” meant to protect clients, said CF Partners’s lawyer, Tim Lord.
Barclays, the U.K.’s second-largest bank by assets, is trying to restore a reputation tainted by revelations its traders attempted to profit from rigging benchmark interest rates, and the mis-selling of products. Chief Executive Officer Antony Jenkins has promised to reform its culture and pay.
Aurelie Leonard, a spokeswoman for London-based Barclays, said the lender never had an advisory relationship with CF Partners.
“Being a leader in emissions trading, Barclays already had a relationship with Tricorona before it had any involvement with CF Partners,” she said in an e-mail.
CF Partners, which specializes in emissions trading and renewable energy, at earlier hearings introduced transcripts of phone conversations Lord said shows Barclays employees talking about circumventing an exclusivity agreement stopping the bank making its own bid.
‘Could Buy It’
“We could buy it,” one said, according to Lord. “We’ve done all the work.” “Let’s not get ourselves in trouble,” another employee said, warning a colleague not to use e-mails or taped telephone lines.
Barclays lawyer Ewan McQuater said at an April hearing they were discussing hedging agreements with Tricorona not a takeover. “The case that has evolved about a secret line of communication is a fantasy.”
Under the European Union’s emissions-trading system, the world’s biggest cap-and-trade program, polluters can buy credits to reduce the cost of complying with pollution rules. The value of the global carbon markets was 61 billion euros last year according to Bloomberg New Energy Finance.
The case is CF Partners (UK) LLP v. Barclays, High Court of Justice, Chancery Division, HC11C03443
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