2017-06-20 06:13:03
Barclays and Former Executives Charged Over Qatar Fund-Raising

LONDON — British officials brought criminal charges on Tuesday against Barclays and four former executives over deals it struck with Qatar to avoid a government bailout during the 2008 global financial crisis, in the latest in a series of regulatory blows against the bank.

The allegations, from the Serious Fraud Office of Britain, are the first time that a British bank and its former executives have been charged criminally with wrongdoing as a result of actions taken as the financial crisis worsened. The charges take aim at a cloud that has hung over the bank for years — namely, questions as to how Barclays was able to steer through the crisis without government assistance.

Nine years ago, the British bank raised nearly 12 billion pounds — more than $15 billion at today’s exchange rates — from an arm of Qatar’s sovereign wealth fund and other investors in two deals, in June 2008 and in October 2008. The deals allowed it to avoid a bailout as a number of major banks on both sides of the Atlantic floundered and sought government lifelines.

The Serious Fraud Office has been scrutinizing whether Barclays properly disclosed an agreement it struck with Qatar at the time that led the lender to pay more than £300 million for “advisory services” as part of the fund-raising. The office has also been examining a $3 billion loan facility that Barclays made available to the Qatar government in November 2008.

The fraud office said that it had charged Barclays, John S. Varley, its former chief executive, and the former bankers Roger A. Jenkins, Thomas L. Kalaris and Richard W. Boath with conspiracy to commit fraud by false representation related to the June 2008 fund-raising.

Barclays and Mr. Varley and Mr. Jenkins were also charged with providing unlawful financial assistance.

The former executives could not immediately be reached for comment on Tuesday. They are expected to appear in Westminster Magistrates’ Court in London next month.

“Barclays is considering its position in relation to these developments,” the bank said in a news release.

Mr. Jenkins, 61, is the former executive chairman of investment banking and investment management in the Middle East and North Africa at Barclays Capital. He helped arrange the fund-raising.

Mr. Kalaris, 61, is the former chief executive of Barclays Wealth and Investment Management. Mr. Boath, 58, is the former European head of Barclays’ Financial Institutions Group.

Barclays said that the fraud office had informed the bank that it had not decided whether it would also bring charges against Barclays Bank P.L.C., an operating unit, with respect to the loan.

The inquiry into the fund-raising is one of a number of regulatory issues that have bedeviled Barclays in recent years. In 2012, a scandal over the manipulation of an important benchmark interest rate, Libor, or the London interbank offered rate, shook the bank to its core. Barclays paid $450 million in penalties, and its American chief executive, Robert E. Diamond Jr., resigned.

The bank’s current chief, James E. Staley, also an American, has been seeking to move the bank past its regulatory burdens and to turn its business around since joining in December 2015. He has moved aggressively to sell off businesses the bank does not consider core operations and resolve legacy misconduct issues that have dragged on its results.

Barclays has said it would no longer be in a restructuring mode by later this year, but it is still facing several regulatory issues.

In December, the United States Justice Department sued Barclays, accusing it of fraudulently misleading the public in the sale of tens of billions of dollars in securities backed by home mortgages. Barclays has said the claims are “disconnected from the facts” and vowed to “vigorously defend” itself.

In April, the bank disclosed that Mr. Staley himself was being investigated by the British authorities after he sought to learn the identity of a whistle-blower. Mr. Staley has apologized over his handling of the matter.

The Serious Fraud Office’s investigation in the Qatar arrangements has been continuing for five years, and a decision on charges has been delayed several times in recent months.

A number of former executives had been interviewed as part of the investigation, including the former chief executives Mr. Diamond and Mr. Varley, the former finance director Chris Lucas, and Mr. Jenkins.

The Financial Conduct Authority, another British regulator, reopened its own investigation in the capital raising this year after new documents emerged in the matter.

The regulator had indicated in 2013 that it planned to fine Barclays £50 million in the case and that the bank was “reckless” in breaching disclosure rules related to the advisory agreements, the bank previously said.

The United States Justice Department and the Securities and Exchange Commission also are conducting inquiries into the matter.

While the Qatar fund-raising showed off the new might and influence of the Persian Gulf’s oil-fueled investment funds, it came at a fraught time for the banking industry.

Barclays initially raised £4.5 billion in June 2008 and was forced to raise another £7.3 billion in October that year, shortly after Lehman Brothers collapsed.

The capital raising allowed Barclays to avoid taking government support at the time, unlike its British rivals Lloyds Banking Group and the Royal Bank of Scotland.

Both Lloyds and the Royal Bank of Scotland sold large stakes to the British government as part of their bailouts. The British government recently sold its final stake in Lloyds and still owns 72 percent of the Scottish bank.

It could take years before the government will be able to exit its ownership of R.B.S., and government officials have said that it may be forced to do so at a loss.

The British financier Amanda Staveley has separately sued Barclays over the capital raising, saying the bank improperly favored the Qataris in the deal and cost her firm nearly $1 billion in potential profit.