Qatar pressured Barclays bosses to mask PM’s holdings, UK court told

Former prime minister of Qatar Sheikh Hamad bin Jassim bin Jaber Al-Thani. (Reuters)
Updated 05 February 2019

Qatar pressured Barclays bosses to mask PM’s holdings, UK court told

  • Prosecutors for the Serious Fraud Office present internal documents to UK court in bank funding case
  • Sheikh Hamad wanted to remain ‘under the radar,’ emails suggest

LONDON: Qatari officials put pressure on Barclays officials to mask the former prime minister of the Gulf state’s planned holding in the bank, a London court heard on Monday.

A high-profile legal case in London centers on allegations that four former executives from Barclays conspired to commit fraud by false representations when Barclays raised more than £11 billion ($14 billion) from investors in 2008.

Prosecutors allege the bankers hid from public documents around £322 million in secret fees paid to the Qatari investors as they fought to meet their tough demands.

As part of the ongoing case, prosecutors for the UK’s Serious Fraud Office on Monday presented internal emails and phone calls to the jury, The Guardian reported.

The documents detailed discussions on how Barclays might disclose Sheikh Hamad bin Jassim bin Jaber Al-Thani’s planned stake in the bank via Challenger, his British Virgin Islands (BVI)-based investment vehicle.

In a phone call played to the jury Richard Boath, the bank’s former European financial institutions boss, recalled how Sheikh Hamad told the bank’s executives that “he’d like his family to have some shares in Barclays.”

In one email, Boath said he was told that Sheikh Hamad “wants to have a very low profile” and “would prefer that HE’s BVI-based investment vehicle be our fifth investor and sign its own subscription agreement,” The Guardian reported.

In the email exchange with the Qataris’ head of legal, Ahmad Al-Sayad, Boath noted that “we would be required to disclose the identity of this vehicle,” the court heard. Al-Sayad responded that Barclays “should find a way to finesse this in order to keep HE under the radar.”
The four ex-Barclays employees have all denied the charges against them in the trail, which is expected to last up to six months.

Prosecutors have not accused Qatar or officials from that country of wrongdoing.


Easy credit poses tough challenge for Russian economy minister

Updated 18 August 2019

Easy credit poses tough challenge for Russian economy minister

  • Measures being prepared to help indebted citizens; situation might blow up in 2021

MOSCOW: New machines popping up in Russian shopping centers seem innocuous enough — users insert their passport and receive a small loan in a matter of minutes.

But the devices, which dispense credit in Saint Petersburg malls at a sky-high annual rate of 365 percent, are another sign of a credit boom that has authorities worried.

Russians, who have seen their purchasing power decline in recent years, are borrowing more and more to buy goods or simply to make ends meet.

The level of loans has grown so much in the last 18 months that the economy minister warned it could contribute to another recession.

But it’s a sensitive topic. Limiting credit would deprive households of financing that is sometimes vital, and could hobble already stagnant growth.

The Russian economy was badly hit in 2014 by falling oil prices and Western sanctions over Moscow’s role in Ukraine, and it has yet to fully recover.

“Tightening lending conditions could immediately damage growth,” Natalia Orlova, chief economist at Alfa Bank, told AFP.

“Continuing retail loan growth is currently the main supporting factor,” she noted.

But “the situation could blow up in 2021,” Economy Minister Maxim Oreshkin warned in a recent interview with the Ekho Moskvy radio station.

He said measures were being prepared to help indebted Russians.

According to Oreshkin, consumer credit’s share of household debt increased by 25 percent last year and now represents 1.8 trillion rubles, around $27.5 billion.

For a third of indebted households, he said, credit reimbursement eats up 60 percent of their monthly income, pushing many to take out new loans to repay old ones.

Orlova said other countries in the region, for example in Eastern Europe, had even higher levels of overall consumer debt as a percentage of national output or GDP.

But Russian debt is “not spread equally, it is mainly held by lower income classes,” which are less likely to repay, she said.

The situation has led to friction between the government and the central bank, with ministers like Oreshkin criticizing it for not doing enough to restrict loans.

Meanwhile, economic growth slowed sharply early this year following recoveries in 2017 and 2018, with an increase of just 0.7 percent in the first half of 2019 from the same period a year earlier.

That was far from the 4.0 percent annual target set by President Vladimir Putin — a difficult objective while the country is subject to Western sanctions.

With 19 million people living below the poverty line, Russia is in dire need of development.

“The problem is that people don’t have money,” Andrei Kolesnikov of the Carnegie Center in Moscow wrote recently.

“This is why we can physically feel the trepidation of the financial and economic authorities,” he added. Kolesnikov described the government’s economic policy as something that “essentially boils down to collecting additional cash from the population and spending it on goals indicated by the state.”

At the beginning of his fourth presidential term in 2018, Putin unveiled ambitious “national projects.”

The cost of those projects — which fall into 12 categories that range from health to infrastructure — is estimated at $400 billion by 2024, of which $115 billion is to come from private investment.