UK seeks to reinstate Barclays fraud charges over Qatar loan

The UK’s Serious Fraud Office in June 2017 charged Barclays Plc and four individuals with conspiracy to commit fraud. Reuters
Updated 24 July 2018

UK seeks to reinstate Barclays fraud charges over Qatar loan

  • Barclays had been charged alongside four former top executives over payments to Qatari investors as part of a $16 billion emergency fundraising
  • Barclays issued a statement confirming it intends to defend the application brought by the SFO

LONDON: The UK’s Serious Fraud Office (SFO) is looking to reinstate charges against Barclays over undisclosed payments to Qatar during the 2008 credit crunch.

The move comes just a couple of months after the Crown Court in London decided to dismiss all charges brought against the bank by the SFO.

“The SFO confirms that on 23 July 2018 it made an application to the High Court to reinstate against Barclays Plc and Barclays Bank Plc all of the charges dismissed by the Crown Court in May 2018,” it said in a statement on Tuesday.

The investigation revolves around Barclays’ capital-raising efforts in 2008 at the height of the financial crisis.

Barclays had been charged alongside four former top executives over payments to Qatari investors as part of a £12 billion ($16 billion) emergency fundraising. That fundraising was an effort to avoid a government bailout other UK banks, including the Royal Bank of Scotland, were forced to take.

That deal allegedly included a $3 billion loan to Qatar at the height of the credit crisis in 2008.

That transaction has been deemed by the SFO as “unlawful financial assistance,” alleging it was used, directly or indirectly, to buy shares in Barclays. British firms are not typically allowed to provide loans to investors in order for them to purchase their own shares.

On June 20, 2017, the SFO charged Barclays Plc and four individuals with conspiracy to commit fraud and the provision of unlawful financial assistance. The following February, Barclays Bank was also charged with unlawful financial assistance.

The four individual defendants were John Varley, former chief executive officer of Barclays Plc; Roger Jenkins, former executive chairman of investment banking and investment management in the Middle East and North Africa at Barclays Capital; Thomas Kalaris, the former chief executive of Barclays Wealth and Investment Management, and Richard Boath, the former European head of financial institutions group at Barclays Capital.

The four are scheduled to face court in January 2019, according to the SFO website.

Graham Spooner, investment research analyst at The Share Center —  a UK-based stockbroker — said SFO’s move will be another “potential cloud” on the horizon for Barclays.

“Investors had been hoping that banks were reaching the end of the regulator bashing and fines that have dogged the sector since the financial crisis of 2008,” he said.

Laith Khalaf, senior analyst at Hargreaves Lansdown, told Arab News that market reaction to the SFO move had been fairly muted so far.

“It’s clearly not good news for Barclays which now faces further litigation costs and further reputational damage. However the market seems to have taken it in its stride with the share price still in positive territory (on Tuesday),” said Khalaf.

“Litigation has become part and parcel of the operating costs of running a bank, and so a little like water off a duck’s back for shareholders, though this particular allegation is extremely serious and could potentially have large financial consequences.”

He added: “However the fact Barclays has already won one day in court provides some reassurance for shareholders.”

Barclays issued a statement on Tuesday, confirming it “intends to defend the application brought by the SFO.” The bank had said in May that it was “likely” that the SFO would seek to reinstate the charges.

UAE property developers’ earnings give Gulf markets a boost

Updated 17 February 2019

UAE property developers’ earnings give Gulf markets a boost

  • Real estate sector gets confidence boost
  • DAMAC gains despite 87 pct drop in Q4 net profits

DUBAI: Most stock markets in the Middle East closed higher on Sunday, reflecting a rally in global stock markets on Friday, and were also boosted by better-than-expected company results, particularly in real estate.

The Abu Dhabi index gained 0.7 percent and the Dubai index 0.6 percent, as two of the largest property developers in the United Arab Emirates posted positive fourth-quarter financial results last week that beat market expectations.

“The market is starting to rebuild confidence in earnings as a driver for sentiment,” said Arqaam Capital in a research note. “Sentiment on the UAE was very weak in 2018, specifically for real estate, on concerns over oversupply risk, pricing pressure that is leading to extended payment plans, and a rental yield compression that is continuing to fall,” Arqaam said.

“But Q4 numbers provided evidence that a few developers have emerged as winners (Emaar Co’s, Aldar) out of market consolidation.” Emaar Properties, Dubai’s largest listed developer, reported a 27 percent rise in fourth-quarter profit.

The stock rose 2 percent on Sunday. DAMAC Properties closed up 0.8 percent, despite having reported a nearly 60 percent fall in full-year profit and an 87 percent drop in fourth-quarter net profits.

In Abu Dhabi, Aldar Properties gained 3.6 percent. Last week, the developer reported a rise in fourth-quarter earnings and higher dividends for 2018. In other sectors, Abu Dhabi Islamic Bank rose 0.5 percent after saying it had no merger and acquisition plans. This was in response to a Bloomberg report last week which said the bank was considering such options.

The Saudi index closed 0.4 percent down, in contrast to the rest of the region’s markets. Arab National Bank reported an increase in full- year net profit to 3.13 billion riyals ($834.62 million) from 3.03 billion riyals one year earlier.

The stock remained unchanged and this failed to give support to the banking sector. Alinma Bank < 1150.SE> and Al Rajhi Banking & Investment Corp. lost 0.3 percent and 0.6 percent, respectively.

In Egypt, where the main index gained 1.4 percent, Orascom Investment Holding, up 3.2 percent, was among the stocks attracting the highest trading volume. Shares in the company jumped last week after its chairman, Egyptian billionaire businessman Naguib Sawiris, said he saw possible investment opportunities in North Korea if a summit between its leader Kim Jong Un and US President Donald Trump later this month was successful.

SAUDI The index lost 0.4 pct to 8,592 points ARABIA DUBAI The index rose 0.6 pct to 2,550 points ABU DHABI The index rose 0.7 pct to 5,070 points QATAR The index gained 0.7 pct to 10,011 points EGYPT The index rose 1.4 pct to 15,199 points KUWAIT The index gainedd 0.1 pct to 5,427 points OMAN The index was down 0.8 pct at 4,077 points BAHRAIN

The index went up 0.6 pct to 1,381 points ($1 = 3.7502 riyals)