Barclays and a number of its former executives are expected to learn this week whether the Serious Fraud Office intends to bring criminal charges in relation to an emergency fundraising at the height of the financial crisis.
The five-year SFO investigation has focused on the events surrounding cash injections from an arm of Qatar’s sovereign wealth fund. The culmination of the investigation comes as speculation grows that the SFO will press ahead with charges, amid reports that an announcement could come as soon as Tuesday.
Decisions have been delayed on a number of occasions. The first deadline was the end of March, which moved to end of May and then the end of June. The SFO has confirmed that the latest timetable is on track.
The investigation was announced in August 2012. The stakes are high, not only for the individuals involved and the bank itself, which has been grappling to restore its reputation after a series of scandals, but also for the head of the SFO, David Green. The agency will be subsumed into the National Crime Agency if Theresa May sees through the Tory manifesto pledge.
No bankers have faced criminal charges in the UK for events that took place during the financial crisis – and neither have the authorities in the UK pursued criminal charges against a high street bank.
The SFO has provided little detail about its investigation but Barclays has been required to make disclosures in its formal stock exchanges announcements. These show that the focus is on “advisory services agreements”between Barclays and Qatar Holding, an investment vehicle for the Gulf state that bought shares in the bank during two fundraisings at the height of the financial crisis. In June 2008, as the financial crisis was brewing, Barclays raised a total of £4.5bn then a further £7.3bn in October from a number of investors including Qatar Holding.
In documents accompanying the June fundraising, Barclays disclosed the arrangement with Qatar but did not put a value on the deal. The bank did not disclose the arrangement in the October documentation. Barclays has since said the fees amounted to £332m payable over five years.
In September 2013, Barclays revealed that the Financial Conduct Authority, intended to fine the bank £50m for reckless behaviour by breaching disclosure rules. The bank contests the findings, while these regulatory proceedings have been stayed while the criminal investigation continues.
When Barclays first announced it was being investigated by the City regulator in 2012 it disclosed that Chris Lucas, then its finance director, was one of “four current and former senior employees” being investigated. Lucas left on health grounds in 2013.
It has been reported that during its pursuit of the case the SFO has questioned 44 individuals, including John Varley, the former chief executive.
Roger Jenkins, the high-profile banker who left Barclays in 2009 and reputedly was paid £40m during one of his years at the bank, was credited with playing a key role in introducing the Qatar investors to the fundraising.
There had been expectations that Barclays would be offered a deferred prosecution agreement (DPA) – a form of settlement – similar to those offered to Rolls-Royce, which paid £671m to settle its case, and Tesco, which fined£129m as part of a DPA. But this now seems unlikely.
There are two other cases connected to the SFO investigation. Amanda Stavely, an advisor to UAE’s Sheikh Mansour bin Zayed al-Nahyan, who put more than £3bn into the October 2008 financing, has brought a civil action claiming fees for her PCP advisory vehicle.
Richard Boath, a former top banker at Barclays, has brought a claim to an employment tribunal. He argues that he was unfairly dismissed after the SFO shared with his employer a 900-page transcript of interviews he gave to criminal investigators. Barclays denies both claims.
This article was written by Jill Treanor, for theguardian.com on Sunday 18th June 2017 15.51 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010