Barclays Faces Fraud Charges Over 2008 Qatari Investment




Barclays PLC and its former chief govt, together with other ex-senior employees of the lender, have been charged with fraud with UK authorities’ useful resource over fundraising deals made with Qatari buyers in 2008, which helped the economic group avoid a government bailout.

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The Serious Fraud Office said Tuesday it had charged Barclays with two offenses of committing fraud through fake representation and one offense of unlawful financial help, contrary to the Companies Act 1985. These are the number one criminal charges brought within the UK towards a bank and its former senior executives regarding its actions in the path of the financial disaster.

One rate of fraud has been brought in competition to the monetary institution and four of its former executives, alongside ex-CEO John Varley, who headed the lender from 2004 to 2011. Also charged are Roger Jenkins, former govt chairman of funding banking & funding management in the Middle East & North Africa for Barclays Capital; Thomas Kalaris, former leader executive of Barclays Wealth & Investment Management; and Richard Booth, former European Head of Financial Institutions Group.

This initial fee relates to a GBP4.50 billion capital enhance in June 2008, with traders such as the Qatar Investment Authority. Barclays, Varley, and Jenkins moreover face a 2nd fraud fee about a similarly capital increase of GBP7.30 billion in October 2008, primarily with Qatari traders. The capital increases allowed Barclays to avoid government bailout received by way of its excessive road friends Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC inside the midst of the financial disaster.

However, the fundraising has subsequently been dogged by accusations that the financial institution concealed the deal designed to make the investment greater attractive. The fraud costs revolve around spherical two “advisory provider agreements” worth GBP322. Zero million, which Barclays agreed to pay the Qatar Investment Authority on the investment time and failed to show. Barclays has already been hit with a GBP50.Zero million pleasant with the aid of using the UK’s Financial Conduct Authority in 2013 for a “reckless” failure to reveal the agreements. Barclays contested the excellent, and its project changed into maintaining even as the SFO is done its own research, with the stay now lifted.

The financial institution, Varley, and Jenkins also face an illegal monetary help fee over a USD3.00 billion loan which Barclays made to the state of Qatar in November 2008. The bank has confronted claims that the loan has become used to finance the Qatari investment, suggesting Barclays essentially lent money to itself, which the financial institution has denied. On Tuesday, Barclays stated it’s far “thinking about its alternatives” about the prices and awaiting greater element from the SFO. This consists of whether or no longer the regulator will deliver charges in opposition to its operating subsidiary Barclays Bank PLC to recognize the loan made to Qatar.

The defendants are because of seeing before Westminster Magistrates’ Court on July three. Moreover, the statistics had a little immediate effect on the financial institution’s percentage charge, with Barclays stock truely 0.Four% lower at 206.00 pence Tuesday. The case is every different excessive-profile lawsuit by way of the SFO, which Prime Minister Theresa May has pledged to merge with the National Crime Agency. The regulator reached a GBP671.0 million settlement with Rolls-Royce Holdings PLC in January over bribery and corruption costs and is presently investigating oil & gasoline services enterprise Petrofac Ltd. A voluntary deferred prosecution deal of the type reached by using the manner of Rolls-Royce could permit Barclays to avoid a crook prosecution.

However, the SFO has pressured that such agreements depend on the volume of co-operation obtained from the agency. Barclays handiest agreed accessible over internal documents referring to the fundraising in February 2016, having resisted the form of skip given that the start of the research using the SFO in 2012, which may additionally depart the regulator unwilling to offer the financial organization and its former executives this type of way out. In the interim, Barclays also faces a GBP721. Zero million civil declares the Qatari fundraising from PCP Capital Partners LLP and PCP International Finance Ltd, run by financier Amanda Staveley. PCP claims it became a potential investor within the deal, instead of simply a guide, and therefore should have received comparable prices to those paid to Qatari buyers.

City white-collar crime professionals were drafted in because the Serious Fraud Office (SFO) these days (20 June) charged Barclays and four former executives with conspiracy to commit fraud, fake illustration, and illegal financial help in arranging a £7.3bn Qatar funding deal at the peak of the monetary catastrophe – the number one such prosecution of a bank. The SFO has charged former Barclays CEO John Varley, former senior funding banker Roger Jenkins, former chief government of Barclays’ wealth department Thomas Kalaris and ex-European head of monetary institutions Richard Both.

Barclays is represented with Willkie Farr & Gallagher’s useful resource, Jenkins with the aid of Brad Kaufman at Greenberg Traurig at the US aspect and Jenkins utilizing Herbert Smith Freehills inside the UK. At the same time, former CEO Varley has counseled Corker Binning. Kalaris has advised Steptoe & Johnson, and Michael O’Kane of Peters & Peters represents both. The defendants will seem earlier than Westminster Magistrates Court on 3 July. Barclays, Varley, Jenkins, Kalaris, and Both are charged with conspiracy to commit fraud via faux illustration almost about the June 2008 capital raising underneath the Fraud Act 2006 and the Criminal Law Act 1977.

Barclays, Varley, and Jenkins are one at a time charged with conspiracy to devote fraud with the aid of faux example almost about the October 2008 capital raising, opposite to the Fraud Act 2006 and the Criminal Law Act 1977, and unlawful economic assist opposite to the Companies Act 1985.  The choice is the primary criminal prosecution against a UK bank and its former executives for their component in that crisis, almost 10 years on. It is five years because the SFO started out investigating the financial group’s fundraising at some stage in the 2008 economic disaster.

The expenses stand up from Barclays’ capital raising arrangements with Qatar Holding and Challenger Universal in June and October 2008. They additionally relate to a $3bn mortgage facility made available to the State of Qatar appearing via its ministry of financial gadget and finance in November 2008. One City accomplice advised Legal Business the reality that this is the first prosecution of a financial institution due to financial catastrophe maneuvering is ‘shameful’ for the authorities. ‘It takes political self-discipline and property to carry these instances, and there seems there is not a large quantity at the government thing.’

‘The SFO’s existence is underneath danger, and it is extremely underfunded. The government does no longer take the SFO significantly and does no longer positioned the proper resources into it,’ he stated. On the SFO’s delay in bringing the primary costs, see you later after the occasion. Since it released the probe, Claire Shaw of Keystone Law said the SFO changed into beneath political pressure to come to a decision, a decade after the crash: ‘There is a trendy feeling in the intervening time that we want to have fees.’

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The SFO not on time because it was expecting witnesses and files from abroad to ensure it was given over the crook threshold required; Shaw stated that the SFO needs to be careful in advance than making prices. In a case like this, you do now not want the spotlight of the arena shine on you, which ones may moreover cause the case to fall apart,’ she stated. However, White & Case London companion Jonathan Pickworth countered that the choice to prosecute Barclays for its fundraising efforts ‘almost a decade within the beyond’ is no longer in the public interest. ‘Who does this punish, and what reason does it serve? All the previous management team moved on many years inside the beyond. This will cause best harm the current shareholders and latest hardworking employees.’

Barclays stated it was considering its function ‘about these tendencies, as it awaits info of the costs from the SFO similarly. The SFO has informed Barclays that it has no longer decided whether or not it will additionally convey fees in competition to Barclays Bankto understand the mortgage’s facility made available to Qatar in November 2008.




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