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.