Law firm steers clear of Qatar on concern Barclays loan illegal
Barclays is being sued over the lender's emergency £7.3 billion fundraising efforts in 2008
Linklaters, a leading British law firm, resigned from advising Barclays on a US$3 billion (Dh11b) loan from the bank to Qatar, according to claims in UK court documents. Linklaters had concerns that the loan could be illegal.
Barclays is being sued by PCP Capital Partners, a private equity firm, over the lender's emergency £7.3bn fundraising efforts in 2008. The bank turned to investors from Qatar in October that year as the financial crisis dug in.
Amanda Staveley, the founder of PCP, claims the bank provided to Qatar £2.4bn in secret side arrangements and undisclosed fees, according to the Financial Times.
Linklaters, who refused to comment on the matter, allegedly quit the brief and urged that the loan documents should include a caveat emphasising that the money would not be reinvested in Barclays.
The court documents filed by PCP suggest that "i) Linklaters resigned (at least in part) because it was concerned the Qatar loan would be illegal, specifically that it would involve financial assistance by Barclays for the purchase of its own shares and ii) Barclays believes that this was the actual reason why Linklaters had resigned."
The case between PCP and Barclays is due for trial in January 2018, following a claim filed by in January 2016.
John Wardell, the barrister representing PCP, argued that Barclays would have gathered a lot of material as a result of investigations from the Serious Fraud Office and the Financial Conduct Authority into the Qatar fund-raising. He pushed for the data to be handed over earlier than the eventual date of April 2017, reports an industry law publication, Law360.
The barrister representing Barclays, Bankim Thanki, stated that while the bank had searched through documents, the process of reviewing the information was the time consuming and had not yet been finished at that early stage.
Updated: August 21, 2017 08:44 PM