Diamond Hits Back at Libor Allegations

LONDON--Former Barclays PLC ( BCS ) Chief Executive Robert Diamond hit back at allegations that he had misled U.K. lawmakers when giving evidence over an interest-rate scandal, calling them "unfair and unfounded."

Mr. Diamond found himself back at the center of the rate-fixing scandal Tuesday, when lawmakers said his version of events leading up to the bank's $450 million settlement with U.K. and U.S. authorities was inconsistent with that of Barclays Chairman Marcus Agius.

In question is an April letter from Financial Services Authority Chairman Adair Turner to Mr. Agius about Barclays, expressing concerns over an "aggressive" approach to regulation. The letter was made public Tuesday.

In his testimony last week, Mr. Diamond was asked about some of the issues raised in the letter and appeared to play them down, noting for example that the FSA was pleased with the "tone at the top" at Barclays. When quizzed by lawmakers Tuesday, Mr. Agius said that Barclays' board took the letter seriously. He declined to comment on Mr. Diamond's testimony when asked about it by the lawmakers.

Members of the committee seized on the apparent discrepancy, with the committee chairman, Andrew Tyrie, saying: "It will look to everybody listening like a complete lack of candor to Parliament by the CEO of Barclays."

John Mann, a member of Labour, tweeted after the hearing, "Agius exposes Diamond's inconsistencies. Only option is for Diamond to be recalled to Treasury Select Committee."

In a subsequent letter to Mr. Tyrie late Tuesday, Mr. Diamond said he was "dismayed" by suggestions that he misled the committee, which he said were "totally unfair and unfounded." He added that the comments "have had a terribly unfair impact upon my reputation, which is of paramount concern to me" and that he would be willing to discuss the issue further.

Mr. Diamond is unlikely to be recalled by the committee before September, if at all, according to a person familiar with the matter, given lawmakers go on recess July 17. Jerry del Missier, a key Diamond lieutenant, will appear before the committee Monday, this person said.

According to another person, before recalling Mr. Diamond, the committee would like to hear from others, including the British Bankers Association, the Financial Services Authority and possibly the Serious Fraud Office.

Evidence given to the committee isn't made under oath.

Parliament's Treasury Select Committee is investigating attempts by Barclays to manipulate Libor at the height of the financial crisis in 2008. Libor is based on daily submissions from a group of leading banks, which report their estimated costs of borrowing from one another, and serves as a benchmark for hundreds of trillions of dollars of loans and derivatives.

Barclays, one of a handful of banks being investigated in the rate rigging, has agreed to pay GBP290 million to settle investigations into the matter.

The debacle has already cleaned out Barclays' corporate suite, with Mr. del Missier resigning along with Messrs. Diamond and Agius. Mr. Agius is staying on to help find both a new CEO and Chairman for the company.

In an apparent effort to cool the political backlash, Mr. Diamond gave up deferred bonuses worth as much as GBP20 million. In a statement Tuesday, Mr. Diamond said he hoped his decision to step down and forgo his bonus "will help close this chapter and allow Barclays to move forward and prosper."

He will still receive some GBP2 million in severance and pension payments.

(Cassell Bryan-Low contributed to this article.)

-Write to Max Colchester at max.colchester@wsj.com.

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