Se­ri­ous Fraud Of­fice ready to rule on Bar­clays in­quiry

Bank could face crim­i­nal charges over fundrais­ing Fo­cus on ad­vi­sory ser­vices agree­ments with Qatar

The Guardian - - FINANCIAL - Jill Tre­anor

Bar­clays and a num­ber of its for­mer ex­ec­u­tives are ex­pected to learn this week whether the Se­ri­ous Fraud Of­fice (SFO) in­tends to bring crim­i­nal charges in re­la­tion to an emer­gency fundrais­ing at the height of the fi­nan­cial cri­sis.

The five-year SFO in­ves­ti­ga­tion has fo­cused on the events sur­round­ing cash in­jec­tions from an arm of Qatar’s sov­er­eign wealth fund.

An an­nounce­ment could come as soon as to­mor­row af­ter de­lays in March, May and June. The SFO has con­firmed that the lat­est timetable is on track. The in­ves­ti­ga­tion was an­nounced in Au­gust 2012.

The stakes are high, not only for the in­di­vid­u­als in­volved and the bank, which has been grap­pling to re­store its rep­u­ta­tion af­ter a se­ries of scan­dals, but also for the head of the SFO, David Green. The agency will be sub­sumed into the Na­tional Crime Agency if Theresa May sees through the Tory man­i­festo pledge.

No bankers have faced crim­i­nal charges in Bri­tain for events dur­ing the fi­nan­cial cri­sis, nor have UK author­i­ties pur­sued crim­i­nal charges against a high street bank.

The SFO has pro­vided lit­tle de­tail about its in­ves­ti­ga­tion but Bar­clays has been re­quired to make dis­clo­sures in its for­mal stock ex­change an­nounce­ments.

Th­ese show that the fo­cus is on “ad­vi­sory ser­vices agree­ments” be­tween Bar­clays and Qatar Hold­ing, an in­vest­ment ve­hi­cle for the Gulf state that bought shares in the bank dur­ing two fundrais­ings at the height of the trou­ble. In June 2008, Bar­clays raised £4.5bn, then a fur­ther £7.3bn in Oc­to­ber from in­vestors in­clud­ing Qatar Hold­ing.

In doc­u­ments ac­com­pa­ny­ing the June fundrais­ing, Bar­clays dis­closed the ar­range­ment with Qatar but did not put a value on the deal.

The bank did not dis­close the ar­range­ment in the Oc­to­ber doc­u­men­ta­tion. Bar­clays has since said the fees amounted to £332m payable over five years.

In Septem­ber 2013, Bar­clays re­vealed that the Fi­nan­cial Con­duct Au­thor­ity, in­tended to fine the bank £50m for reck­less be­hav­iour by breach­ing dis­clo­sure rules.

The bank con­tests the find­ings, and th­ese reg­u­la­tory pro­ceed­ings have been stayed while the crim­i­nal in­ves­ti­ga­tion con­tin­ues.

When Bar­clays first an­nounced it was be­ing in­ves­ti­gated by the City reg­u­la­tor in 2012 it dis­closed that Chris Lu­cas, then the bank’s fi­nance di­rec­tor, was one of “four cur­rent and for­mer se­nior em­ploy­ees” be­ing in­ves­ti­gated. Lu­cas left on health grounds in 2013.

It has been re­ported that dur­ing its pur­suit of the case the SFO has ques­tioned 44 in­di­vid­u­als, in­clud­ing John Var­ley, the for­mer chief ex­ec­u­tive.

Roger Jenk­ins, the high-profile banker who left Bar­clays in 2009 and re­put­edly was paid £40m dur­ing one of his years at the bank, was cred­ited with play­ing a sig­nif­i­cant role in in­tro­duc­ing the Qatar in­vestors to the fundrais­ing.

There had been ex­pec­ta­tions that Bar­clays would be of­fered a de­ferred pros­e­cu­tion agree­ment (DPA) – a form of set­tle­ment – sim­i­lar to those of­fered to Roll­sRoyce, which paid £671m to set­tle its case, and Tesco, which fined£129m as part of a DPA. But this now seems un­likely.

There are two other cases con­nected to the SFO in­ves­ti­ga­tion. Amanda Stave­ley, an adviser to Sheikh Man­sour bin Zayed al-Nahyan, of the United Arab Emi­rates royal fam­ily, who put more than £3bn into the Oc­to­ber 2008 fi­nanc­ing, has brought a civil ac­tion claim­ing fees for her ad­vi­sory ve­hi­cle.

Richard Boath, a for­mer top banker at Bar­clays, has brought a claim to an em­ploy­ment tri­bunal. He ar­gues that he was un­fairly dis­missed af­ter the Se­ri­ous Fraud Of­fice shared with his em­ployer a 900-page tran­script of in­ter­views he gave to crim­i­nal in­ves­ti­ga­tors. Bar­clays de­nies both claims.

Amanda Stave­ley has brought a civil ac­tion against Bar­clays claim­ing fees she says are owed for help­ing at­tract fi­nance dur­ing the 2008 cri­sis

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