Serious Fraud Office charge Barclays Bank and former CEO with conspiracy to commit Fraud
The Serious Fraud Office (SFO) have announced that Barclays Bank and four former executives have been charged with three counts of conspiracy to defraud and false representation during the £4.5bn cash call in June 2008 and the £7.3bn cash call in October 2008 undertaken to avoid a government bailout in 2008. Those charged include former Chief-Executive John Varley, Roger Jenkins (who put the deal together), Tom Kalaris (Head of the Investment Bank) and Richard Boath (Head of Corporate Finance). These are the first criminal charges to be filed here in the UK against a bank and its former senior management team following the 2008 financial crisis, at the culmination of this five-year investigation.
In its announcing statement, the SFO said that “the charges relate to Barclays Plc’s capital raising arrangements with Qatar Holding LLC and Challenger Universal Ltd, which took place in June and October 2008, and a $3bn loan facility made available to the State of Qatar acting through the Ministry of Economy and Finance in November 2008.”
During the 2008 crisis, Barclays undertook two fundraising activities involving Qatari Investors. In the second that was undertaken in October 2008, Barclays sought investment from the Qatar and Abu Dhabi royal families. The then-prime minister of Qatar and his family invested a total of £6.1bn.
The SFO and the Financial Conduct Authority (FCA) however raised concerns as the bank simultaneously conducted side deals denoted as "advisory services agreements" (ASAs) that totalled £2.4bn. The bank failed to fully disclose these transactions to the market.
In the FCA's investigation, it was revealed that particular focus had been given to identifying whether Barclays secretly loaned money to Qatar to then reinvest in itself, something prohibited to avoid manipulation of accounts. The FCA investigation previously planned to fine the bank £50m but their inquiry has now been put on hold while the SFO completes its investigation.
Barclays shares have dipped 0.46% since the market opened, trading at 205.8p.