UK said to probe Barclays deal with Qatar

Financial Times says authorities looking at alleged deal which allowed bank to avoid bailout

British authorities are looking into an allegation that Barclays loaned Qatar money to invest in the bank as part of its rescue fundraising at the height of the 2008 financial crisis, the Financial Times reported.

Qatar Holding is not accused of any wrongdoing, the FT said.

The Financial Services Authority (FSA) and Serious Fraud Office (SFO) have been looking into Barclays' emergency fundraising since July.

Qatar Holding invested £5.3bn ($8.4bn) in Barclays in June and October 2008, helping it avoid being bailed out by the government, unlike rivals Lloyds Banking Group and Royal Bank of Scotland.

Allegations over a loan to the Qataris is a new thread of the investigation, the FT said, citing two sources familiar with the situation.

A Barclays spokeswoman said: "Both the FSA and SFO investigations are on-going and, as such, we are unable to comment further."

The FSA and SFO both declined to comment.

New Barclays chief executive Antony Jenkins has been trying to restore the bank's reputation after a string of scandals, including a $450m fine in June for rigging Libor interest rates that prompted the resignations of previous CEO Bob Diamond and chairman Marcus Agius.

The deal with Qatar was controversial from the outset. Shareholders were angry Qatar was offered more attractive terms to invest than existing investors, and a sale of warrants in November left Qatar sitting on a gain of £1.7bn from its investment, according to Reuters estimates.

Qatar Holding, part of Qatar Investment Authority, which was set up by the state in 2005 to diversify investments away from oil and gas into new assets, is the bank's biggest shareholder with a 6.7 percent stake.

Barclays said in August that Britain's fraud prosecutors had launched a criminal probe into payments between the bank and Qatar, a month after revealing the FSA's investigation into dealings between the two parties.

It said the FSA probe was into the bank and four current and former senior employees, including finance director Chris Lucas.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: David Jay

Nothing surprises anyone anymore about these despicable and unscrupulous banks around the world. The only surprise is, it has taken 4+ years to surface.

All comments are subject to approval before appearing

Further reading

Features & Analysis
Banking on reforms in Kuwait

Banking on reforms in Kuwait

As Kuwait stares down its first deficit in 20 years, the Gulf...

Saudis face dilemma between size and pricing in debut bond sale

Saudis face dilemma between size and pricing in debut bond sale

Riyadh is under pressure to maximise the size of its international...

Saudis cut wage, benefit bill in delicate pursuit of austerity

Saudis cut wage, benefit bill in delicate pursuit of austerity

Some Saudis appear prepared to accept austerity following the...

Most Discussed