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 $US475 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 $US700 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 $US190 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.”
NOW WATCH: Hedge fund legend Ray Dalio to individual investors: Market timing is ‘like playing poker’ against world’s best
Business Insider Emails & Alerts
Site highlights each day to your inbox.