Barclays loaned Qatari investors $3 billion to help finance an emergency fundraising at the height of the credit crisis in 2008, court documents filed in London on Thursday allege.
The case brought by Amanda Staveley's PCP Capital Partners alleges that the bank failed to disclose the loan, which was used to buy Barclays shares, and that it paid Qatar 346 million pounds ($459 million) in additional fees and payments.
The share sale was "a fraud on its shareholders", the lawsuit said.
"Contrary to the manner in which Barclays presented the Qatari participation in the October 2008 capital raising to the market, in fact the Qatari investors' entire investment was funded by Barclays," the court documents said.
Barclays denied any wrongdoing in the case over the bank's emergency fundraising from Gulf investors at the height of the credit crisis, which allowed it to avoid a state bailout.
"We believe the claim against Barclays is misconceived and without merit and Barclays will be vigorously defending it," the bank said.
Businesswoman Staveley, who played a prominent role in Abu Dhabi's Sheikh Mansour bin Zayad al Nahayan's investment in Barclays at that time, is suing the bank at the High Court in London.
Staveley alleges in the lawsuit that she was given a written and verbal promise by Barclays staff that her syndicate would get the same terms as Qatari investors, whereas in fact the Qataris received extra fees to the tune of 346 million pounds.
Her PCP private equity group is claiming $1 billion plus damages for alleged fraudulent misrepresentation in a civil case that hinges on the terms Qatari and Abu Dhabi investors received for helping Barclays raise about 7 billion pounds in total.
The case is unfolding months before the Serious Fraud Office (SFO) is due to decide whether to charge Barclays and former executives in a separate criminal inquiry into financial arrangements with Qatar.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.