Barclays Bank unit charged over 2008 Qatar loan deal

LONDON: Barclays Plc’s operating unit faces a new criminal charge in relation to the lender’s controversial £12bil fundraising at the height of the financial crisis a decade ago.

The accusation of “unlawful financial assistance” against Barclays Bank Plc relates to a US$3bil loan Barclays secured from Qatar in November 2008, the lender said in a statement.

The Serious Fraud Office (SFO) had already filed conspiracy to commit fraud and unlawful financial assistance charges against the holding company and four former executives, including ex-chief executive officer John Varley, in June and a trial is scheduled for early 2019.

Any charges against the operating unit are problematic because, if convicted, the lender’s ability to do business globally might be affected. Regulatory approvals and banking licences are usually tied to banks’ operating units, through which products and services are provided.

Both the main company and Barclays Bank intend to defend the charges against them, it said.

“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 said.

The new charge adds to years of negative publicity for Britain’s most storied bank.

It has paid well over £1bil in fines to settle charges that it manipulated foreign-exchange markets and rigged the Libor interest-rate setting mechanism.

The Financial Conduct Authority is currently investigating current CEO Jes Staley’s attempt to discover the identity of a whistleblower.

The case relates to the nature of £322mil in fees Barclays paid to the Qatar Investment Authority and a US$3bil loan facility it made available to the nation as part of side deals to the fundraising from Qatari and other investors in 2008. The deal allowed Barclays to avoid a state bailout when the industry crashed.

The SFO opened an investigation into the Qatar deal in 2012. About a dozen senior executives were inter- viewed across the five-year-probe, including another former chief executive Bob Diamond. The deal involved Qatar Holding LLC, a subsidiary of the country’s QIA sovereign wealth fund, and Challenger Universal Ltd, an investment vehicle of Qatar’s then prime minister.

The fundraising is also being reviewed by the Financial Conduct Authority, which re-opened its probe earlier last year after additional documents came to light.

The regulator had previously fined the bank £50mil in relation to how it disclosed the fees to the Qataris. The bank said previously it is challenging the fine, which has been stayed until after the criminal proceedings are resolved. — Bloomberg