x Abu Dhabi, UAETuesday 16 January 2018

Barclays and Qatar in inquiry

British authorities are looking into an allegation Barclays lent Qatar money to invest in it as part of a rescue fundraising at the height of the 2008 financial crisis.

British authorities are looking into an allegation Barclays lent Qatar money to invest in it as part of a rescue fundraising at the height of the 2008 financial crisis.

United Kingdom rules forbid a public company from giving financial assistance in order to acquire its shares or those of a parent company, according to the Financial Times.

"Both the FSA [Financial Services Authority] and SFO [Serious Fraud Office] investigations are ongoing and, as such, we are unable to comment further", a Barclays spokesman said.

The FSA, the SFO and Qatar Holding declined to comment.

At the weekend, Antony Jenkins, who became the Barclays chief executive in August, said he did not want to be considered for a bonus after a difficult year for the bank, fined £450 million (Dh2.59 billion) for a rate rigging scandal, and its stakeholders.

The issue of pay at Barclays and other banks is set to flare again this week when Mr Jenkins, David Walker, Barclays' chairman, and their counterparts at Lloyds and HSBC are quizzed on pay by UK policymakers.

Stephen Hester, the Royal Bank of Scotland chief executive, said last June he would waive his bonus for last year following a computer systems failure which caused disruption to millions of its customers.

Qatar Holding, which according to the Financial Times is not accused of any wrongdoing, invested £5.3bn in Barclays in June and October 2008, helping it avoid a government bailout, unlike rivals Lloyds and RBS.

The FSA and SFO have been looking into the investment since July.

Allegations of a loan to the Qataris are a new thread of the investigation, the Financial Times said, citing two sources familiar with the situation.

The deal with Qatar was questioned from the outset. Shareholders were angry it was offered more attractive terms than existing investors.

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 the Qatar Investment Authority, is the bank's biggest shareholder with a 6.7 per cent stake.

Barclays said in August Britain's fraud prosecutors had launched a criminal inquiry 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 investigation was into the bank and four current and former senior employees, including the finance director Chris Lucas.

Sources have said another is Roger Jenkins, the main architect of the Qatar fundraising. Neither Mr Lucas nor Mr Jenkins commented.

* with Reuters