Fri | Nov 24, 2017

Barclays, former CEO charged with fraud over Qatar deal

Published:Wednesday | June 21, 2017 | 12:00 AM
This July 27, 2009 file photo shows John Varley, the group CEO of Barclays Bank, as he leaves after attending a meeting at the Treasury in London.

British regulators charged Barclays bank and four former executives, including then-CEO John Varley, with conspiracy to commit fraud when they asked Qatar for £6.1 billion (US$7.7 billion) to avoid a government bailout at the height of the financial crisis in 2008.

The Serious Fraud Office (SFO) announced the charges Tuesday following an investigation into two rounds of fundraising from Qatar in June and October of 2008. The probe centred on two side agreements under which Barclays paid the Qatari investors £322 million over five years, the bank disclosed in 2013.

The charges are the first in Britain against a bank and former executives for activities during the 2008 financial crisis.

The fundraising efforts in 2008 came as banks around the world struggled to keep their doors open. Britain's Northern Rock was forced out of business, while the Royal Bank of Scotland and the Lloyds Banking Group were forced to accept billions of pounds of state aid and the government oversight that came with it.

The SFO's announcement comes as another blow to current Barclays CEO, Jes Staley, who is trying to repair the bank's reputation following a series of scandals while facing an investigation into his own conduct after he attempted to identify a whistle-blower. Barclays shares were down 1 per cent in late trading on the London Stock Exchange.

Barclays said it is "considering its position" and "awaits further details of the charges from the SFO".

Varley, 61; former investment banking chief Roger Jenkins, 61; Thomas Kalaris, 61, who headed the bank's wealth management division; and Roger Boath, 58, head of the European financial institutions group, were all charged with conspiracy to commit fraud by false representation in relation to the first round of fundraising. Barclays, Varley and Jenkins were charged with another count in regard to the second round, as well as a separate charge of providing unlawful financial assistance.

The four are scheduled to appear at Westminster Magistrates' Court on July 3, together with a representative of the bank.

- AP

Barclays' recent scandals: a recap

British banking giant Barclays was charged alongside four of its former executives on Tuesday for 2008 dealings with Qatar. It is one of many scandals and legal issues that the bank has faced over the past five years.

June 2012: Barclays is fined US$453 million by United States and United Kingdom regulators after its employees manipulated a key market interest rate, Libor, between 2005 and 2009.

July 2012: Chairman Marcus Agius, CEO Bob Diamond and Chief Operating Officer Jerry del Missier resign amid the Libor scandal.

February 2014: Three former Barclays employees are charged in Britain with manipulating Libor.

April 2014: Another three former Barclays employees, based in New York, are charged by UK prosecutors.

May 2015: Barclays is fined US$2.4 billion by the US government for manipulating foreign exchange rates. It is one of four banks to pay a total of over US$5 billion in fines.

July 2016: Four former Barclays employees go to prison for manipulating Libor.

November 2015: British regulators fine Barclays £72 million (US$89 million) for failing to safeguard against the risk of the bank being used to facilitate financial crime.

Dec 2016: Barclays is one of several banks sued by the US government over the sale of risky mortgage-backed securities before the global financial crisis.

April 2017: CEO Jes Staley comes under regulatory investigation following his several attempts to identify a company whistle-blower, a breach of protection laws.

June 2017: Barclays, former CEO John Varley and three other former executives are charged with fraud relating to two fundraising deals with Qatar that allowed Barclays to avoid a government bailout during the 2008 crisis. The executives allegedly did not appropriately disclose side deals in which the Qatari investors received money and loans from Barclays.