Barclays investigation details given to Serious Fraud Office

Inquiry looking into fees allegedly paid by bank during banking crisis to avoid a taxpayer bailout

The Financial Services Authority has handed information to the Serious Fraud Office about an ongoing investigation to funds raised by Barclays in 2008.

The SFO has not decided whether to launch its own formal investigation into fees paid by Barclays during the banking crisis which helped the bank avoid a taxpayer bailout, according to the Independent.

The existence of the FSA investigation was disclosed by Barclays last month when it admitted its finance director Chris Lucas was one of four current and past employees being scrutinised over the fundraising.

Last month, as it announced a £759m in pre-tax profits, the bank appeared to suggest that the FSA was investigating whether all the fees had been disclosed in two fundraisings that took place in June and November 2008.

At the time, Barclays sources insisted that it did not involve payments to any current or former staff.

Barclays would not comment on Wednesday and neither would the SFO, but the FSA said: "Both the FSA and Barclays have already confirmed there is a formal investigation under way with regards to disclosure of fees relating to the capital raising exercises as set out in their interim results. Clearly we discuss a range of issues with the SFO on a regular basis and we cannot comment specifically on what they may or may not be investigating – that is a matter for the SFO."

Statements made by Barclays last month spelt out the FSA had "commenced an investigation involving Barclays and four current and former senior employees, including Chris Lucas".

The bank added: "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 said in July that it considers that it satisfied its disclosure obligations and confirmed that it will co-operate fully with the FSA's investigation.

In June 2008 the bank raised £4.5bn through an issue of new shares and in November 2008 it raised more than £7bn. Much of the focus appears to be information provided in the June 2008 fundraising which describes "an agreement for provision of advisory services" by Qatar to Barclays in the Middle East.

The June fundraising outlined an agreement "to explore opportunities for a co-operative business relationship" with Sumitomo Mitsui Banking Corporation of Japan. The total fees disclosed for this fund raising was around £100m.

In the separate November 2008 fundraising, it provided five separate disclosures of fees that amounted in total to around £300m.

The FSA routinely hands information to the SFO when it is conducting investigations. For instance, the City regulator has been providing information to the SFO about the Libor rigging scandal which is now being used as the basis for an investigation by the fraud agency into attempts to manipulate interest rates.

Barclays was fined a record £290m for attempting to manipulate Libor although the FSA has made clear eight other financial institutions are also being investigated. The SFO said on 30 July that its Libor investigation covered a number of financial institutions.


Jill Treanor, City editor

The GuardianTramp

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