U.K. Regulator Reopens Probe Into Barclays' 2008 Deal With Qatari Investors
March 23 2017 - 3:00PM
Dow Jones News
By Margot Patrick and Max Colchester
LONDON -- Britain's financial regulator has reopened a probe
into how Barclays PLC persuaded Qatar's sovereign-wealth fund to
bail out the bank during the 2008 financial crisis, just as a
separate investigation of that matter by the Serious Fraud Office
nears resolution.
The Financial Conduct Authority recently conducted a fresh round
of interviews in the case and is studying new evidence, a person
familiar with the matter said Thursday.
The case is one of the last remaining financial crisis-era
probes in the U.K.
In 2013, the FCA fined Barclays GBP50 million (about $79.4
million at the time) over advisory services agreements it struck
with Qatar Holding LLC as it pumped money into the bank in 2008.
Barclays didn't fully disclose to shareholders at the time that it
agreed to pay the Qatari group GBP322 million over five years,
potentially breaking disclosure rules. The FCA also alleged the
primary purpose of the GBP322 million payment was to get Qatar to
buy Barclays shares.
But the case remains on hold while the SFO has carried out its
own investigation into the bank and several individuals. Barclays
contests both the allegations and the fine.
The Financial Times reported earlier Thursday that the FCA had
reopened its case.
The head of the SFO, David Green, told The Wall Street Journal
on Tuesday that it would decide soon whether to file charges
against Barclays and former top executives over their handling of a
GBP7.3 billion ($9 billion) capital injection primarily from Middle
Eastern investors. The SFO has said it would aim to make a decision
on any charges by the end of the month.
The long-running review picked up speed last year when Barclays
released thousands of emails and documents that it previously had
said were protected by attorney-client confidentiality.
Several former Barclays executives have been questioned by the
SFO, according to people familiar with the matter. The fraud office
must now decide whether to press charges against the individuals
involved, the bank or both.
The U.S. Department of Justice and Securities and Exchange
Commission also are investigating the agreements, Barclays has
disclosed in regulatory filings.
While other U.K. banks including Royal Bank of Scotland Group
PLC and Lloyds Banking Group PLC tapped taxpayers for bailouts,
Barclays raised funds privately during the financial crisis. Any
public sanction could shine further light on how Barclays
executives got Middle Eastern investors to prop it up during a
period of intense market turbulence.
All of the executives and board members at the bank during this
capital-raising have since left.
Barclays also is fending off a GBP721 million lawsuit by PCP
Capital Partners LLP, a company run by London-based financier
Amanda Staveley, related to the bank's financial crisis
fundraising.
The suit alleges the advisory agreements Barclays struck with
Qatar Holding were a sham and gave the wealth fund more favorable
treatment than Abu Dhabi investors who also invested and whom Ms.
Staveley helped bring into the fundraising. Barclays disputes the
allegations. In February, a U.K. judge ordered Barclays to hand
over emails related to the capital raise.
Write to Margot Patrick at margot.patrick@wsj.com and Max
Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
March 23, 2017 14:45 ET (18:45 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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