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Barclays Bank faces fresh SFO charges over £2.2bn Qatar loan Barclays Bank charged again by SFO over £2.2bn Qatar loan
(about 4 hours later)
Charges relating to emergency fundraising in 2008 follow case against parent company last yearCharges relating to emergency fundraising in 2008 follow case against parent company last year
Press Association Sean Farrell
Mon 12 Feb 2018 09.05 GMT Mon 12 Feb 2018 13.24 GMT
First published on Mon 12 Feb 2018 08.25 GMTFirst published on Mon 12 Feb 2018 08.25 GMT
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The Serious Fraud Office (SFO) has charged Barclays Bank over a $3bn (£2.2bn) loan given to Qatar as part of a side deal linked to its emergency fundraising in 2008. The Serious Fraud Office (SFO) has charged Barclays for a second time over a $3bn (£2.2bn) loan the bank made to Qatar when Middle East investors bought shares in the bank to prop it up at the peak of the financial crisis.
It extends a charge brought against the parent firm for “unlawful financial assistance” last July. The SFO has extended its case against Barclays’ holding company to Barclays Bank plc, the lender’s operating company. The decision raises the pressure on Barclays because banking licences and regulatory approvals are held at the operating level.
At the time, the SFO had not yet decided whether to charge the Barclays Bank unit over the loan as well, but it has now been charged with the same offence. The additional charge is the latest move in an SFO case dating back to 2012. Last year, the SFO charged Barclays’ parent company, its ex-chief executive, John Varley, and three former senior bankers with offences linked to the bank’s £11.8bn emergency fundraising in 2008.
Both Barclays and its bank unit have said they will defend themselves against the charges. “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,” the company said in a statement. The SFO charged Barclays and the former employees with conspiracy to commit fraud by false representation. The offences carry a maximum prison sentence of 10 years for the individuals and a fine for the bank’s holding company.
The emergency fundraising at the centre of the SFO case allowed Barclays to avoid the fate of its bailed-out rivals Lloyds Banking Group and Royal Bank of Scotland. Barclays pulled off an £11.8bn fundraising package from Qatari backers and other investors in 2008 to sidestep the need for a government rescue, which left Lloyds and RBS part-nationalised. Prosecuting Barclays at the operating level means that, if found guilty, the bank could face regulatory penalties, including withdrawal of its banking licence. Investment banking counterparties might also decide not to trade with Barclays.
Money was pumped in by state-backed Qatari investors, as well as Abu Dhabi royals and investors from Singapore. But the way the bank secured the Qatari investments has since been mired in controversy. The SFO said: “The charges relate to financial assistance Barclays Bank plc gave to Qatar Holding between 1 October and 30 November 2008, which was in the form of a $3bn loan for the purpose of directly or indirectly acquiring shares in Barclays plc.”
That included a $3bn loan made to Qatar acting through its Ministry of Economy and Finance in November 2008. When the banking sector was threatened with collapse 10 years ago, Barclays raised capital from Qatari backers and other investors. The investment allowed the bank to avoid a government bailout that resulted in Lloyds Banking Group and Royal Bank of Scotland being part-nationalised.
After a five-year investigation into the events surrounding the cash call, the SFO last summer brought charges of conspiracy to commit fraud against Barclays itself, as well as a string of former executives. The SFO has had the option of bringing a second charge against Barclays since charging the bank last June. Barclays appeared to be ready to resist further pressure, saying its operating and holding companies would defend the charges in court.
It marked the first criminal charges to be brought in the UK against a bank and its former executives for activities during the financial crisis. “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,” the company said in a statement.
The SFO said on Monday that a date for the first court appearance in relation to the charge against Barclays Bank would be “set in due course”. The charges against Barclays were the first criminal charges to be brought in the UK against a bank and its former executives for activities during the financial crisis.
Barclays is under different leadership and has spent the past few years trying to repair relations with regulators and the government since the Bank of England ousted Bob Diamond, Varley’s replacement as chief executive, in 2012. But for the SFO’s purposes the bank remains the same.
The SFO said on Monday that a date for the first court appearance in relation to the charge against Barclays Bank would be “set in due course”. The full trial is expected to start in 2019.
BarclaysBarclays
BankingBanking
Serious Fraud OfficeSerious Fraud Office
QatarQatar
Middle East and North AfricaMiddle East and North Africa
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