The Strategist

Ex Barclays executives accused of Qatari deal fraud

06/20/2017 - 14:42

The British Serious Fraud Office today filed charges of fraudulent collusion against Barclays and its former top managers. The management believes that attraction of investments from Qatar, which allowed the bank to avoid nationalization in the midst of the financial crisis, was held with violation of the law.

Gideon Benari via flickr
Gideon Benari via flickr
Former CEO of Barclays Plc John Varley, former Executive Chairman of the Board of Directors of the investment banking division for the Middle East and North Africa Roger Jenkins, former director of the state management department Thomas Kalaris and former head of the European division Richard Boath will appear on July 3 before the Magistrates Court in London on charges of "Conspiracy to commit fraud" and "providing illegal financial assistance" in violation of the Companies Act of 1985. According to the official report of the Serious Fraud Office, the bank itself is being prosecuted in the case.

In 2008, at the height of the financial crisis, which resulted in, inter alia, the temporary nationalization of a number of large British banks such as Royal Bank of Scotland and the Lloyds Banking Group, Barclays received financial assistance from Qatar investors - the state-owned Qatar Holding and the private fund Challenger, The former Prime Minister of Qatar. £ 7 billion received from Qatar then helped the bank avoid nationalization. However, soon serious suspicions arose as to how the assistance was being implemented. As it turned out, before receiving assistance from the emirate, Barclays provided the government of the country with a $ 3 billion loan and paid hundreds of millions of pounds sterling as part of the agreements with the Qatari people to provide consulting services.

According to the British authorities, the fraud is obvious: not only that some of the money received from Qatar was actually borrowed from the bank itself, so also the persons making decisions about investing in the bank received commission from the bank. The commission, at that, looked quite like some form of financial incentive in the decision-making process.

The bank still refuses to comment seriously, saying that it is "considering the situation" and is waiting for "additional information from SFO". Previously, representatives of the bank repeatedly said that there was nothing illegal or even reprehensible in their deal with the Qatar people. In turn, the lawyer of one of the accused, Roger Jenkins, has already stated that he does not see any prospects for the prosecution. "Naturally, in those very difficult conditions of 2008, Mr. Jenkins appealed and received both external and internal legal assistance for virtually every action that is now attributed to him," said his lawyer, Brad Kaufman. 

This is not the first major scandal for the leading British bank. In particular, the bank was accused of manipulating the interbank LIBOR rate: in 2012, the institution had to pay a fine of $ 453 million and carry out serious personnel reshuffle.