SFO delays decision again on charging Barclays over 2008 fundraising

Decision of five-year investigation into deal with Qatar sovereign wealth fund now expected in June after officers fail to meet end of May deadline

The Serious Fraud Office has further delayed its decision on whether to bring any criminal charges against Barclays and former executives at the bank over a 2008 fundraising.

A decision is now expected in mid-June, despite the SFO setting an end-of-May deadline earlier in the year – itself a delay from an end of March deadline.

The latest setback means that Barclays and a group of former senior bankers will not know the outcome of the five-year investigation until after the general election on 8 June. The probe into the circumstances around an emergency fundraising from a unit of Qatar’s sovereign wealth fund was announced in August 2012.

The decision into one of the most high-profile investigations conducted by the SFO comes at a sensitive time. The Conservative party manifesto outlined plans to roll the SFO into the National Crime Agency, in an attempt to “improving intelligence sharing and bolstering the investigation of serious fraud, money laundering and financial crime”.

The investigation, according to disclosures by Barclays, focuses on commercial arrangements between the bank and Qatar Holding – an investment vehicle for the Gulf state – which bought shares in Barclays during two fundraisings at the height of the financial crisis. In June 2008 Barclays raised a total of £4.5bn then a further £7.3bn in October from a number of investors including Qatar Holding.

In documents accompanying the June fund aisings Barclays disclosed an “advisory services” arrangement with Qatar but did not put a value on the deal. It did not disclose the arrangement in the October documentation or value them. The bank has since said the fees amounted to £332m payable over five years.

Barclays first revealed investigations into Qatari arrangements in July 2012 and admitted in September 2013 that the City regulator, the Financial Conduct Authority, wanted to fine it £50m for “reckless behaviour” during the cash calls. That finding was stayed while the SFO investigated, although the City regulator has since reopened its inquiry following the disclosure of new documents by the bank.

The bank had also admitted to the US justice department and the Securities and Exchange Commission have been investigating. Barclays did not comment on Friday on the further delay but in its annual report published in February it said it continued to contest the City regulator’s findings and that it “continues to respond to requests for further information in that investigation, which is at an advanced stage”.

The investigation has reportedly involved 44 individuals being questioned by the SFO, including the bank’s former finance director Chris Lucas and chief executive John Varley.

At one point there had been expectations that Barclays would be offered a deferred prosecution agreement – a form of settlement – although this no longer appears to be on the cards. Earlier this year, Rolls-Royce paid £671m to settle its case with the SFO while Tesco paid a fine of £129m as part of a DPA over an accounting scandal.

The fundraisings also prompted other legal cases. The bank has described a £721m claim from financier Amanda Staveley as “fundamentally misconceived”. Her claim against the bank is for her firm PCP Capital Partners, for fees she argues should have been received for being involved in the financings. Also, a former Barclays banker, Richard Boath, is claiming he was unfairly dismissed after the SFO shared a 900-page transcript of interviews relating to the criminal investigation with the bank.

The events of 2008 have prompted a number of other court cases. Royal Bank of Scotland is attempting to settle claims from shareholders that they were misled during the time of a £12bn cash call in April 2008. A high court judge has adjourned the case – which was due to start last Monday and would require former RBS chief executive Fred Goodwin to give evidence - until 7 June to allow settlement attempts.

Later in the year, Lloyds Banking Group faces accusations from shareholders that they were not told that HBOS was dependent on emergency funding from the Federal Reserve and the Bank of England at the time of its takeover by Lloyds in 2008.


Jill Treanor

The GuardianTramp

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