UK: Barclays faces new Qatar charge from Serious Fraud Office
12 Feb 2018

The Serious Fraud Office has brought a further charge against Barclays regarding its capital raising arrangements with Qatar during the financial crisis.

On Monday it charged the lender with obtaining financial assistance unlawfully, following-on June last year when it charged it and four individuals with conspiracy to commit fraud and the provision of unlawful financial assistance contrary to the Companies Act 1985.

During the 2008 financial crisis, the British bank turned to Qatar for financial assistance. It took out a multi-billion dollar loan from Qatar Holdings, which is owned by the State of Qatar, to avoid a UK government bailout.

In turn, it issued a loan to Qatar.

An SFO spokesman said Monday’s charge is against Barclays Bank Plc, the operating firm, whereas June’s charges were against Barclays Plc, the holding company, and the individuals.

In a statement, Barclays said on Monday that it intends to defend the respective charges brought against it.

“Barclays does not expect there to be an impact on its ability to serve its customers and clients as a consequence of the Charge having been brought,” it added.

London-based Philip Marshall QC at Serle Court Chambers said: “It’s surprising that the SFO brought another charge against the operating company this time round. The statutory provision pertaining to obtaining financial assistance unlawfully is usually used to protect creditors. For example, liquidators can use it for the benefit of the creditors who might suffer if there are problems. But in this case, if it results in a fine or penalty, then the statutory provision is not being used to benefit creditors but quite the opposite.”

The SFO first announced it was opening its investigation in August 2012.

In June last year it explained: “The charges relate to Barclays Plc’s capital raising arrangements with Qatar Holding LLC and Challenger Universal Ltd, which took place in June and October 2008, and a US$3 billion loan facility made available to the State of Qatar acting through the Ministry of Economy and Finance in November 2008.”

The individuals charged with conspiracy to commit fraud by false representation in relation to the capital raising include former Barclays CEO John Varley; Roger Jenkins, former executive chairman of Investment Banking; Thomas Kalaris, former chief executive of Barclays Wealth and Investment Management, and Richard Boath, former Barclays European Head of Financial Institutions Group.

Varley and Jenkins were also charged with unlawful financial assistance contrary to s151 of the Companies Act 1985.

– Irene Madongo

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