Barclays £2bn fraud charge

Bank loan to Qatar ‘illegal’ claims SFO

THE Serious Fraud Office yesterday charged Barclays with giving Qatari investors an illegal loan at the height of the

financial crisis.

The bank denies that a £2.2billion advance to Qatar in late 2008 was connected to an earlier £12bn loan it got from the country’s sovereign wealth fund and others. The money from Qatar and the others helped Barclays avoid a strings-attached taxpayer rescue, as happened to the Royal Bank of Scotland and Lloyds Banking Group. The SFO alleges that the money given to Qatar was used either directly, or indirectly, to buy shares in Barclays, which the SFO says is “unlawful financial assistance” under the Companies Act 1985.

It is the second such charge laid against the bank.

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 emergency fundraising in 2008.

That made history as the the first criminal charges to be brought in the UK against a bank and its former executives for activities during the financial crisis. But yesterday’s move could prove more damaging as it relates to the lender’s operating arm. If found guilty, Barclays could lose its licence to operate in countries around the world. Barclays said it would fight both charges. In a statement, 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.”

Money was pumped into the bank 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.

That included a loan made to the State of Qatar acting through the Ministry of Economy and Finance in November 2008.