Regulators have charged Barclays Bank over a £2.2 billion loan given to Qatar as part of a side deal linked to its emergency fundraising in 2008.
The Serious Fraud Office (SFO) alleges that Barclays Bank gave Qatar Holding the loan ‘for the purpose of directly or indirectly acquiring shares in Barclays’. The Companies Act deems it unlawful for banks to lend money to themselves.
The SFO extends a charge brought against the parent firm for ‘unlawful financial assistance’ last July.
At the time, the SFO had not yet decided whether to charge the Barclays Bank unit over the loan as well. Barclays Bank has now been charged with the same offence.
Both Barclays and its bank unit have said they will defend themselves against the charges.
Who has been charged and what for?
Barclays Bank Plc was today charged with unlawful financial assistance, which is contrary to the Companies Act 1985. The bank is accused of giving out a £2.2billion loan for the purpose of directly or indirectly acquiring shares in Barclays Plc.
In June 2017, the holding company, Barclays Plc, was charged with conspiracy to commit fraud and the provision of unlawful financial assistance contrary to the Companies Act 1985.
Four former directors – John Varley, Roger Jenkins, Thomas Kalaris and Richard Boath – were also charged for the same offences.
‘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,’ the company said in a statement.
The emergency fundraising at the centre of the SFO case allowed Barclays to avoid the fate of its bailed-out rivals Lloyds Banking Group and Royal Bank of Scotland.
Barclays pulled off an £11.8 billion fundraising package from Qatari backers and other investors in 2008 to sidestep the need for a Government rescue, which left Lloyds and RBS part-nationalised.
Money was pumped in 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 £2.2 billion loan made to the State of Qatar acting through the Ministry of Economy and Finance in November 2008.
Both Barclays and its bank unit have said they will defend themselves against the charges
After a five-year investigation into the events surrounding the cash call, the SFO last summer brought charges of conspiracy to commit fraud against Barclays itself, as well as a string of former executives.
How Barclays found itself in the dock
2008 – Barclays secures a £11.8 billion fundraising package from Qatari backers and other investors to stave off nationalisation
January 2016 – Amanda Staveley files claim against Barclays for legal fees in relation to the Qatar deal
July 2017 – Serious Fraud Office charges Barclays (the parent firm of Barclays Bank’ for ‘unlawful financial assistance’
August 2017 – Legal documents suggest Linklaters stopped advising Barclays due to concerns of the deal
November 2017 – Staveley’s lawsuit against Barclays is postponed until October 2019 to avoid prejudicing SFO investigation into Barclays
February 2018 – SFO charges Barclays Bank with the same offence.
It marked the first criminal charges to be brought in the UK against a bank and its former executives for activities during the financial crisis.
The SFO said on Monday that a date for the first court appearance in relation to the charge against Barclays Bank will be ‘set in due course’.
Law firm Linklaters allegedly stopped advising Barclays because it was concerned about the deal, according to court papers filed in London.
The lawyers are said to have warned that the loan should include a specific provision that the money could not be used to buy Barclays shares.
Meanwhile, Amanda Staveley, of PCP Capital Partners, claims her firm is still owed legal fees for helping raise £7 billion from Qatar and Abu Dhabi, and has mounted a £1.2 billion fight.
Staveley is a former girlfriend of Prince Andrew and is attempting to buy Newcastle United from its current owner, Sports Direct CEO Mike Ashley.
Meanwhile, Amanda Staveley, (pic on June 30 2015 in London) of PCP Capital Partners, claims her firm is still owed legal fees for helping raise £7 billion from Qatar and Abu Dhabi, and has mounted a £1.2bn fight