Crisis-era fraud charges haunt Barclays as rivals move on

Gladys Abbott
June 21, 2017

Two individuals, including its former Chief Executive John Varley, were also charged with the provision of unlawful financial assistance. His roles at the British bank have included heading its American business and wealth management unit and he was appointed to Barclays's executive committee in 2009.Several former executives were interviewed by the SFO, but didn't face charges.

The defendants will appear at Westminster Magistrates' Court on July 3.

Barclays says it is considering its position and awaiting further details.

The Serious Fraud Office announced the charges Tuesday following an investigation into two rounds of fundraising from Qatar in June and October of 2008.

Barclays said it is considering its position in relation to the SFO's announcement.

Barclays, its former chief executive and three other ex-senior executives have been charged by United Kingdom authorities with fraud related to the emergency cash injections that saved the bank from a government bailout at the height of the 2008 financial crisis.

The charges relate to Barclays's capital arrangements with Qatar Holding, a subsidiary of the emirate's QIA sovereign wealth fund, and Challenger Universal, an investment vehicle of the country's then prime minister. "This is the most significant charging decision for the SFO in recent times, if not ever", said Sarah Wallace of legal firm Irwin Mitchell.

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The SFO added in a statement that former CEO John Varley was one of those who would face court following a five-year investigation. The second - "unlawful assistance" - could be more serious.

John Varley, aged 61, was chief executive at Barclays between 2004 and 2011.

The former JPMorgan banker took over the reins at Barclays in December 2015 and impressed investors by restructuring the bank to remove bad assets and reinvigorate investment banking.

Qatar, meanwhile, has made a healthy profit from its investment and remains Barclays' biggest shareholder, with a stake of around six percent, according to Thomson Reuters data.

Unlike its peers Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC, the Middle Eastern equity injections meant Barclays was able to avoid a bailout by British taxpayers.

The Financial Conduct Authority (FCA) has also reopened its probe into the Qatari fundraising deal and is understood to be reviewing new evidence which could prompt it to reconsider a £50 million fine against the banking giant four years ago.

SFO Investigations had focused on advisory services worth 322 million pounds, which Barclays agreed to pay the Qatar Investment Authority.

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