Fraud charges against Barclays over Qatar deals

The headquarters of the British bank Barclays (R) is seen at the Canary Wharf district of east London on June 20, 2017. Britain's Serious Fraud Office said on June 20 it had charged Barclays, a former chief executive of the banking giant and three other ex-managers, with "conspiracy to commit fraud" linked to emergency fundraising from Qatar during the financial crisis. (AFP)
Updated 21 June 2017

Fraud charges against Barclays over Qatar deals

DUBAI: Qatar’s 2008 bailout of Barclays has come back to haunt the British banking giant, with the leveling of fraud charges against it and four former senior executives over multibillion-pound deals nine years ago.
The Serious Fraud Office (SFO), the UK’s top financial prosecutor, announced charges as Qatar’s financial sector showed signs of further strain under the weight of sanctions brought to bear by a coalition of neighboring countries including Saudi Arabia and the UAE.
It has for months been considering action over the undisclosed terms of £6.1 billion ($7.7 billion) worth of deals that saw Qatari investors buy shares to prop up the bank at the height of the global financial crisis, after an investigation that began in 2012.
The SFO on Tuesday announced charges of conspiracy to commit fraud and provision of unlawful financial assistance against the Barclays parent company and four executives who were at the heart of the deals.
The highest profile is John Varley, former group chief executive, who becomes the first boss of any global bank to face criminal charges as a result of the 2008 crisis, which sparked a global crash and recession.
The others were well-known deal-doers at the bank: Roger Jenkins, former chairman of investment banking in the Middle East; Thomas Kalaris, former head of wealth and investment management; and Richard Boath, former head of financial institutions in Europe.
The SFO charges named Qatar Holding, one of the troubled country’s investment vehicles and Challenger Universal, an investment unit set up by former Qatari Prime Minister Hamad bin Jassim Al-Thani, as counterparties to the deals but no British criminal actions have been brought against any Qatari citizens.
Separately, Qatari bankers on Tuesday reported that the Qatar Investment Authority (QIA), its main sovereign wealth fund, made billions of dollars worth of deposits in local banks in an effort to head off any liquidity crisis as fears grew in the country that the current blockade by its neighbors might spark a run on financial institutions there.
In 2008, Barclays was facing its own liquidity crisis as the strains of the global financial crisis weighed on all the big British banks. Some were forced to swap their independence for government bailout funds to avoid bankruptcy.
Barclays, under Varley, chose instead to seek assistance from the Arabian Gulf in a set of transactions that brought in billions of pounds of capital. The first tranche involved investors in Qatar and in Abu Dhabi, the second just Doha investors.
Barclays agreed to pay Qatari investors £322 million in return for the capital injections in side deals that were not disclosed at the time and which the SFO alleges amounted to fraud. There are no allegations against the Abu Dhabi investor.
A third transaction in 2008 involved Barclays making available a loan of $3 billion to Qatar, which the SFO alleges amounted to unlawful financial assistance.
Barclays said it was considering its position in relation to the charges. “Barclays awaits further details of the charges from the SFO,” it said.
The former executives either declined to comment or professed their determination to fight the charges. Jenkins’ lawyer said he intended to vigorously defend against the charges. “As one might expect in the challenging circumstances of 2008, Mr. Jenkins sought and received both internal and external legal advice on each and every aspect of the accusations leveled today by the SFO,” he told the Financial Times.
Boath is involved in a separate action against the bank in a claim for wrongful dismissal over information he provided the SFO in the course of their investigation.
Barclays is also fighting a £720 million claim from financier Amanda Staveley, who was involved in the 2008 transactions.
The charges come at a politically sensitive time for both Qatar and the UK. The former is resisting pressure from its neighbors in the Gulf to halt alleged support for terrorist organizations, which has led to the cutting of economic ties with its two biggest neighbors, Saudi Arabia and the UAE.
On the liquidity measures taken recently, the Qatar Central Bank (QCB) told Reuters: “QIA regularly places deposits in local banks, this is normal.”
Qatar is also a big investor in Britain, with extensive real estate interests and ownership of high-profile assets like the Harrods department store.
Britain, seeking to make up lost investment in the wake of the impending withdrawal from the EU, has made no secret of its need for stronger investment links with the Gulf.
• Frank Kane is an award-winning business journalist based in Dubai. He can be reached on Twitter @frankkanedubai


Qatar Airways expects to keep Airbus A380s parked for years

Updated 19 October 2020

Qatar Airways expects to keep Airbus A380s parked for years

  • State-owned airline parked its 10 A380s due to the devastating impact of the coronavirus crisis on travel demand
  • Qatar Airways boss Akbar Al-Baker criticizes rivals operating the A380 as ‘foolish’

DUBAI: Qatar Airways does not expect to use its Airbus A380s for at least the next two years, its chief executive said on Monday, longer than a previous projection for the superjumbos to possibly return to service in 2021.
The state-owned airline has parked its 10 A380s due to the devastating impact of the coronavirus crisis on travel demand.
“We don’t think we are going to operate our A380s for at least the next couple of years,” Akbar Al-Baker told an online conference.
He had said in June the jets would remain parked until at least the middle of next year. The Gulf carrier plans to start retiring its A380s from 2024 when its oldest superjumbo reaches ten years of service.
The A380s would return once the airline saw the growth rate of 2019, before the pandemic struck, Baker said.
The 100 destinations to which the airline is currently flying is 25 fewer than planned due to a new wave of infections in Europe and travel restrictions, he said.
Baker criticized rivals operating the A380 as “foolish,” saying there was insufficient demand and so prices would be driven down.
Air France retired its A380s this year, while British Airways and Qantas retired their Boeing 747s as the crisis sent air travel into free fall.
Gulf carrier Etihad Airways is mulling whether its parked A380 fleet will ever return, while Emirates, the largest superjumbo operator, has resumed some services with the jet.