Fraud charges raised against Barclays in Qatar case
Over their actions in the 2008 financial crisis Barclays along with four of its former executives have been charged with fraud.
The Serious Fraud Office (SFO) case is in relation to the way the bank had raised billion of pounds from Qatari investors, which enabled it to avoid a government bailout.
John Varley who is the Former chief executive is one of the four ex-staff who are scheduled to appear at Westminster Magistrates’ Court on 3rd July 2017.
Barclays has said that it is considering its position and awaiting further details.
The bank in a statement has said “The charges arise in the context of Barclays’ capital raisings in June and November 2008. Barclays awaits further details of the charges from the SFO.”
This is the first case where criminal charges related to the financial crisis have been brought against a bank in the UK.
Mr Varley, who is a former senior investment banker, Roger Jenkins, Thomas Kalaris, a former chief executive of Barclays’ wealth division, and Richard Boath, the ex-European head of financial institutions all have been charged with conspiracy to commit fraud in the June 2008 capital raising.
In addition to these charges, Mr Varley and Mr Jenkins have also been charged with the same offence in relation to the October 2008 capital raising and with providing unlawful financial assistance.
Mr Jenkins lawyer told a news agency that he will “vigorously defend” himself against the charges.
Brad Kaufman from American firm Greenberg Traurig said”As one might expect in the challenging circumstances of 2008, Mr Jenkins sought and received both internal and external legal advice on each and every topic covered by the SFO’s accusations.”
Mr Boath, who last year took Barclays to an employment tribunal on the grounds of wrongful dismissal. also pledged to defend himself.
He said in a statement “The SFO’s decision to charge me is based on a false understanding of my role and the facts. I was not a decision-maker and had no control over what the bank did in 2008.”
John Varley would for most have been an unlikely choice as the first former bank chief executive to face criminal charges over the events of the financial crisis.
one of the City’s avuncular, peaceful patricians Mr Varley was, often portrayed rightly or not as a check on Barclays’ hard charging investment bank which was led by Bob Diamond.
Now,Mr Varley along with the bank which he had once led, faces two types of charges, both of which relate to fundraisings from Qatar in 2008.
The first charge which is faced by the accused is of conspiracy to commit fraud, which relates to “advisory” fees which were paid to Qatar. The second charge of “unlawful assistance” could be a more serious one.
The charges relate to a £2bn loan advanced to Qatar after the fundraisings were negotiated. The implication being that there was a money go round at work. Barclays had been handing Qatar some of the money it was using in order to support the British bank.
In 2008 Barclays took £12bn from Qatar, as the banks had scrambled to avoid nationalisation. The SFO had looked into the payments which were made to Qatar at that time and afterwards. Furthermore the SFO also investigated whether those payments were correctly disclosed and if they might have been an inducement to Qatar to support the British bank.
The emergency funds received by Barclays had allowed the bank to avoid a government bailout in 2008, it was at a time when rivals Lloyds Banking Group and Royal Bank of Scotland had been forced to rely on a taxpayer rescue.
The Financial Conduct Authority (FCA) also reopened its probe into the deal and is understood to be reviewing new evidence which could prompt it to reconsider a £50m fine against the banking giant four years ago.
The FCA imposed the penalty after finding that Barclays had failed to disclose the arrangements and fees it paid to the Qatari investors, but Barclays contested the fine and it was put on hold while the SFO conducted its investigation.
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