Serious Fraud Office Slams Barclays with New Charge After Qatar Capital Scandal

By Rept0n1x [CC BY-SA 3.0] via Wikimedia Commons

Today, the fraud watchdog of the United Kingdom slaps a new charge onto Barclays Bank, in connection with an emergency fundraising that it conducted during the summer of 2008.

Today, the Serious Fraud Office (SFO) accused Barclays of providing “unlawful financial assistance,” after the company raised £4.5bn last June of 2008 and £7.3bn last October of the same year from investors including Challenger Universal and Qatar Holding.

The SFO said that Barclays provided Qatar Holding an illegal loan amounting to $3bn (£2.2bn) “for the purpose of directly or indirectly acquiring shares in Barclays.” According to the Companies Act, it is against the law for banks to lend some money to themselves.

In relation to the fundraise, criminal charges have already been imposed against Barclays and some former executives, with trial dates scheduled for 2019. The SFO charged Barclays, Barclays former chief executive John Varley, and executives Thomas Kalaris, Richard Boath, and Roger Jenkins last year with conspiracy to commit fraud through false representation.

Barclays, Jenkins, and Varley were also already accused of providing unlawful financial assistance.

The bank was assumed to have been in discussions with the SFO regarding a deal to dodge the charges because they could affect the ability of the bank to operate globally.

Meanwhile, the investment firm that is founded by Amanda Staveley, PCP Capital Partners, is suing Barclays for a maximum of £1.2bn in connection to crucial capital raisings. PCP claims that it should have received fees from Barclays for the role that it played in advising Sheikh Mansour bin Zayed al-Nahyan of Abu Dhabi, who contributed over £3bn to the raise which helped the bank dodge a taxpayer bailout.

Barclays was able to postpone the case, which was scheduled to go to trial last January, as it believed that it could prejudice the probe of the SFO.