x Abu Dhabi, UAEFriday 21 July 2017

Barclays at centre of inquiry by fraud squad

Barclays and Qatar Holding are at the centre of an investigation by British authorities over their past business dealings, an announcement that came just hours before the UK bank appointed a new chief executive.

Barclays has appointed Anthony Jenkins as its new chief executive. AP Photo
Barclays has appointed Anthony Jenkins as its new chief executive. AP Photo

Barclays and Qatar Holding are at the centre of an investigation by British authorities over their past business dealings.

The announcement of the inquiry by the UK's serious fraud office (SFO) plunged the British bank into turmoil just hours before it appointed Anthony Jenkins as its new chief executive.

It had been hoped the appointment would draw a line under the London interbank offered rates (Libor) scandal that last month forced the resignation of Bob Diamond, Mr Jenkins' predecessor.

"Barclays confirms that the [SFO] has commenced an investigation into payments under certain commercial agreements between Barclays and Qatar Holding," the bank said.

The SFO is a UK government agency that investigates complex alleged fraud cases. It said last month it had launched an investigation into "the Libor matter", stopping short of giving any further details.

Barclays raised close to £12 billion (Dh69.79bn) in 2008 from a number of investors including Qatar Holding.

The capital increase allowed Barclays to avoid being bailed out by the British government in the wake of the financial crisis.

The latest investigation marks an inauspicious start for Mr Jenkins, who was named as Barclays' new chief executive yesterday.

Barclays had previously appointed Sir David Walker as its new chairman after the Libor scandal.

In June, the bank was fined US$453 million (Dh1.66bn) in a settlement with US and UK regulators over allegations its traders had colluded to rig Libor. The scandal also forced the resignation of the chairman Marcus Agius and the chief operating officer Jerry del Missier.

In testimony before British politicians last month, Mr Diamond said the Bank of England had discussed the issue of fixing Libor rates just two days before Barclays said it had raised billions from Middle Eastern investors.

Mr Diamond said at the time he feared the bank's Libor submissions, then higher than many of its peers, could convince the market his bank was incapable of funding itself and ultimately scupper the deal with the Arabian Gulf investors.

The lender revealed in its half-yearly results last month five of its employees had been targeted by the UK financial services authority (FSA) over fees related to capital increases during that time.

"The FSA has commenced an investigation involving Barclays and four current and former senior employees, including Chris Lucas, group finance director," the bank said in its financial statement.

"The FSA is investigating the sufficiency of disclosure in relation to fees payable under certain commercial agreements and whether these may have related to Barclays' capital raisings in June and November 2008."

Barclays added it would cooperate fully with the FSA investigation, saying it believed it "satisfied its disclosure obligations".

Qatar Holding declined to comment, while the SFO and the FSA declined to comment further.

Barclays’ shares fell 1.53 per cent yesterday to 183.5 pence each.

ghunter@thenational.ae