Barclays faces criminal investigation into payments made to Qatar Holding after bank sought emergency funding in 2008
The Serious Fraud Office has launched an investigation into payments made after Barclays tapped Middle Eastern investors for emergency funds in 2008.
The inquiry – which relates to the disclosure of fees paid to the sovereign investor Qatar Holding – represents the latest blow to the bank, which has just lost its chief executive Bob Diamond and chairman Marcus Agius after being fined £290m by US and UK regulators for its role in the Libor fixing scandal.
In a statement issued after the stock market had closed last night, the bank said: “Barclays confirms that the Serious Fraud Office has commenced an investigation into payments under certain commercial agreements between Barclays and Qatar Holding LLC”. It declined to add further comment.
News of the formal SFO investigation comes after Barclays confirmed in July that the Financial Services Authority had begun a separate probe into Barclays on the same topic, when the bank admitted its finance director Chris Lucas was one of four current and past employees being scrutinised over the fundraising. The bank said at the time that it had satisfied its disclosure obligations and that it will co-operate fully with the FSA.
The investigation by the FSA – which does not have any powers to investigate alleged crimes apart from insider dealing and share scams – will now run alongside that of the SFO, which is understood to involve a broad look at the company’s conduct with the Qataris. A source close to the inquiry said: “The SFO is looking into the role of the company [Barclays]. I wouldn’t discount anything”.
The SFO has already received information from the FSA and it is understood to have requested further documents from the bank. Both the SFO and the FSA declined to comment.
In June 2008, Barclays raised £4.5bn through an issue of new shares and in November 2008 it raised more than £7bn. Much of the focus appears to be on information provided in the June 2008 fundraising that describes “an agreement for provision of advisory services” by Qatar to Barclays in the Middle East.
The June fundraising outlined an agreement “to explore opportunities for a co-operative business relationship” with Sumitomo Mitsui Banking Corporation of Japan. The fees disclosed for this fundraising totalled around £100m.
In the November 2008 fundraising, Barclays provided five separate disclosures of fees that amounted in total to around £300m.
Qatar Holding is a unit of the Qatar Investment Authority, which is the largest shareholder in Barclays with a 6.65% stake, according to data compiled by Reuters.
While the investigation into the fees does not involve other banks, Barclays was far from being alone in the Libor scandal. Last month, Royal Bank of Scotland boss Stephen Hester warned that his bank faced a huge fine for its role.