Barclays, Four Former Top Executives Charged With Fraud Over Fundraising With Qatari Investors

Criminal charges from U.K.’s Serious Fraud Office relate to crisis-era investments

Barclays said it was considering its position in relation to the announcement.

Barclays said it was considering its position in relation to the announcement. PHOTO: NEIL HALL/REUTERS

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Updated June 20, 2017 4:22 a.m. ET

The U.K.’s Serious Fraud Office on Tuesday filed criminal charges against Barclays PLC and four former top executives linked to their handling of Middle Eastern investments that rescued the bank at the height of the financial crisis.

The case marks the first time that top executives at a U.K. bank face criminal charges for their actions during the financial crisis. If Barclays is found guilty it faces a fine but wouldn’t lose its banking license.

The SFO charged the individuals and the bank with conspiracy to commit fraud. Two individuals, including its former Chief Executive John Varley, were also charged with the provision of unlawful financial assistance.

The allegations center on how Barclays structured two capital injections from Qatari investors as the bank raised £11.8 billion ($15 billion) to prop it up during the 2008 financial market meltdown. Barclays said it paid £322 million in “advisory services” to Qatari investors, which wasn’t initially disclosed after the capital was raised.

The SFO’s charges also relate to a $3 billion loan facility Barclays made to the State of Qatar acting through the ministry of economy and finance in November 2008, just after its second capital raise.

Barclays said in a statement it is “considering its position in relation to these developments.”

Unlike its peers Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC, the Middle Eastern equity injections meant Barclays was able to avoid a bailout by British taxpayers.

The SFO’s case involves a cadre of Barclays top executives who steered the bank at the time. Mr. Varley, who was the bank’s chief executive until 2011 and Roger Jenkins, a former top investment bank executive who played a key role in orchestrating the capital raises, were charged with conspiracy to commit fraud and unlawful financial assistance. Thomas Kalaris, who used to run the bank’s wealth division, and Richard Boath, who headed the bank’s European financial institutions group, were charged with conspiracy to commit fraud.

Under U.K. law, when the men appear at the magistrate’s court, they will have the option to enter a plea. Any bail conditions will be set and prosecutors will give a brief synopsis of their case. Magistrates then decide which court will hear it. They will appear before a court in London on July 3.

The Barclays case is a major test for the SFO, which has in recent years failed to successfully prosecute a number of high profile bribery and corruption cases. U.K. Prime Minister Theresa May recently pledged to fold the SFO into another crime fighting agency.

Barclays is already facing other legal problems linked to the Qatar capital raisings. In a separate probe, the U.K.’s Financial Conduct Authority imposed a £50 million fine over the disclosure failures. The FCA said earlier this year that it was reviewing the case after being handed new evidence. Barclays is contesting the fine.

The U.S. Justice Department and the Securities and Exchange Commission are also investigating the payments made to Middle Eastern officials. Separately PCP Capital Partners, a private-equity group, is suing Barclays for $1 billion alleging it made “sham payments” to the Middle Eastern investors. PCP, which helped organize Abu Dhabi’s investment in Barclays in 2008, also alleges that Barclays lent Qatar investors $3 billion to invest back into the bank. Barclays has previously denied this.

The court case is another distraction for Barclays’s current chief executive, Jes Staley, as he attempts to clean up the bank. Mr. Staley is himself currently under investigation by U.K. regulators for trying to identify a whistleblower at the bank.

Write to Max Colchester at max.colchester@wsj.com and Margot Patrick at margot.patrick@wsj.com

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https://www.wsj.com/articles/barclays-four-former-top-executives-charged-with-fraud-over-fundraising-with-qatari-investors-1497941440

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Barclays and former bosses face criminal charges over 2008 Qatar deals

The bank and four ex-staff are charged over the bank’s deals with Qatar at the height of the financial crisis.

09:40, UK,Tuesday 20 June 2017

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The bank said it was ‘considering its position in relation to these developments’

Barclays and four former senior executives are facing criminal charges relating to investment sought from Qatar at the height of the banking crisis.

The case dates back to 2008 when the bank’s rivals – Lloyds and Royal Bank of Scotland – took state bailouts as the financial sector came under huge strain.

Emergency funds raised by Barclays at the time allowed it to avoid a government bailout.

The Serious Fraud Office (SFO) has capped a five-year investigation by announcing Barclays has been charged with two counts of conspiracy to commit fraud and the provision of unlawful financial assistance.

The charges centre on the bank’s move to raise cash from Qatari investors Qatar Holding and Challenger Universal in June and October 2008, and a $3bn (£2.4bn) loan made available to the State of Qatar in November of that year.

John Varley was chief executive of Barclays at the time of the fundraisings
John Varley was chief executive of Barclays at the time of the fundraisings

The bank’s former chief executive John Varley and its former investment banking chief Roger Jenkins have been with conspiracy to commit fraud by false representation in relation to a first round of investment in June 2008.

Varley and Jenkins have also been charged with another count in regard to a second capital raising in October 2008.

They are also facing a charge of unlawful financial assistance.

Roger Jenkins
Roger Jenkins left Barclays in 2009

Two other men in senior roles at the bank in 2008 – Thomas Kalaris and Richard Boath – both face a single charge of conspiracy to commit fraud by false representation in relation to the June 2008 fundraising only.

Mr Varley, who was Barclays chief executive between 2004 and 2011, headed the bank at the time of the fundraising, while Mr Jenkins is also said to have played a key role in orchestrating the deal.

Mr Kalaris – an American banker living in London – was formerly in charge of the bank’s wealth and investment management division, while Mr Boath was the former European head of financial institutions group at Barclays.

The defendants are due to appear at Westminster Magistrates’ Court on 3 July.

Image may contain: 1 personThomas Kalaris formerly ran Barclays Wealth Fund

The bank said in response that it was “considering its position in relation to these developments” and it had been informed by the SFO that it had not made a decision on whether to also bring charges against it in respect of the loan.

It added that the City watchdog, the Financial Conduct Authority (FCA), had reopened its investigation while US authorities were continuing their own inquiries.

Barclays also reaffirmed it was defending a civil claim against it, brought by PCP Capital Partners and PCP International Finance, in relation to the second capital raising.

http://news.sky.com/story/barclays-charged-by-sfo-over-2008-fundraising-10920903

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One Response to “Barclays, Four Former Top Executives Charged With Fraud Over Fundraising With Qatari Investors”

  1. daveyone1 Says:

    Reblogged this on World4Justice : NOW! Lobby Forum..

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