Barclays should remove chief executive Jes Staley from its board over his ties to convicted paedophile Jeffrey Epstein, according to activist investor Sherborne.
In a letter to shareholders, Sherbone, which is led by Edward Bramson, said the decision by Barclays’ board to nominate Staley for reelection amid an ongoing regulatory investigation was “ill advised”.
Sherborne, which said it is now Barclays’ largest shareholder, said it “strongly recommends” the board “rescind their unanimous recommendation to re-elect Staley” at the bank’s annual general meeting in May.
Last month, the banking giant disclosed that Staley was under investigation by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) over his links to Epstein, who took his own life last year while awaiting trial for sex trafficking charges.
The regulators launched the probe after receiving emails from Staley’s former employer JP Morgan that suggested the pair’s relationship was friendlier than Staley had claimed, the Financial Times reported.
Barclays have said the watchdogs are investigating “Staley’s characterisation… of his relationship with Epstein and the subsequent description of that relationship”.
“The public interest in the United Kingdom’s most established financial institutions leading from the front in setting and following best corporate governance is vital to the country’s global reputation,” Sherborne said in the letter.
“The public interest not only requires the likes of Barclays to set the highest standards, but it also dictates that there should be unvarnished transparency on major ethical questions and on the suitability of individuals that lead them,” it continued.
Staley and Epstein had a relationship dating back to 2000, when Staley took over as head of JP Morgan’s private bank, which counted Epstein as a client.
Epstein was convicted of procuring an underage girl for prosititution and soliciting a prostitute in 2008, and Staley has admitted to maintaining contact with Epstein seven years after his conviction.
After the regulatory probe into his links with Epstein was disclosed, Staley said his relationship with the disgraced financier began to “taper off” after he left JP Morgan in 2013, and had ended “totally” in 2015, the year he took over as chief executive of Barclays.
“If Staley knowingly continued providing financial services to Epstein, which could have helped to facilitate the latter’s child prostitution activities, in order to reap personal career benefits, it raises the question as to whether he is suitable to be an executive of a financial institution,” said Sherborne.
Barclays declined to comment on the letter. The bank’s shares fell 3.24 per cent in morning trading.