Barclays Qatari loan fraud charges thrown out by Crown Court
Barclays celebrated a significant victory over the Serious Fraud Office (SFO) yesterday when the Crown Court dismissed charges surrounding the bank’s huge capital raising during the financial crisis a decade ago.
The SFO alleged that a $3bn (£2.2bn) loan Barclays gave Qatari investors led to the Qatari acquisition of shares in a Barclays fundraising, an arrangement that seemed to stave off the need for a government bailout.
Under the Companies Act, it is unlawful for banks to lend money to themselves.
At the time, rival banks such as Lloyds and Royal Bank of Scotland were forced to go cap-in-hand to British taxpayers as the government ploughed billions into propping up the UK’s biggest lenders.
Although the charges against Barclays plc and its operating subsidiary were thrown out yesterday, the SFO said it had not reached the end of the road.
Read more: Barclays CEO Jes Staley fined for his handling of whistleblowers
“We are likely to seek to reinstate the charges by applying to the High Court,” an SFO spokesman said. It was not clear when that application would be heard. In February, the SFO charged Barclays with giving “unlawful financial assistance”, after it raised £4.5bn in June 2008 and £7.3bn that October from investors including Qatar Holding and Challenger Universal.
The SFO’s case has been seen by many City analysts as Barclays’ most challenging legacy issue stemming from the 2008 crisis.
At the end of March, Barclays agreed to pay $2bn to settle claims in the US related to the sale of toxic mortgage-backed securities in the run-up to the financial crisis.
At the time chief executive Jes Staley described the settlement as “fair and proportionate”.
Staley was also boosted by a recent decision from City regulators not to sanction Barclays over a whistleblowing scandal.
Staley was fined close to £650,000 for trying to uncover the identity of a whistleblower at the bank but avoided further punishment.
Separate to yesterday’s decision, four former Barclays bankers face a charge of conspiracy to commit fraud by false representation when they negotiated a capital injection for the bank from Qatar, in a trial due to start next year.
Read more: Fraud watchdog slaps Barclays with new charge over Qatar scandal
The four are former CEO John Varley, and senior executives Roger Jenkins, Tom Kalaris and Richard Boath.
Barclays said the dismissal of the charges against itself should not be taken to have any bearing on whether other people may have committed a criminal offence.
Businesswoman Amanda Staveley has a separate $1bn civil lawsuit against Barclays over the same fundraising.
Barclays shares closed up 0.7 per cent at 208.9p last night.