Britain’s Serious Fraud Office (SFO) said yesterday it was charging Barclays with conspiracy to commit fraud and unlawful financial assistance, making it the first bank to face criminal charges over actions taken during the financial crisis.
Barclays said it was considering its position and awaiting further information about the charges, which follow a five-year SFO inquiry into how it avoided the fate of Lloyds and RBS by staving off a state bailout.
The SFO also charged former top Barclays executives John Varley, Roger Jenkins, Thomas Kalaris and Richard Boath after investigating a two-part fundraising that included a $3bn (R38.6bn) Barclays loan to the wealthy Gulf state.
A lawyer for Jenkins said he would “vigorously defend” himself against the charges, adding his client had received both internal and external legal advice at the time.
A spokesperson for Boath declined to comment. A lawyer representing Varley declined to comment and a lawyer for Kalaris could not immediately be reached for comment.
The men are the most senior bankers to be charged in Britain for alleged crimes during the financial crisis and face jail sentences of up to 10 years if found guilty.
Barclays, the first bank to be prosecuted since David Green took over as head of the SFO in 2012, could be fined. There was no allegation of wrongdoing against Qatar, which is a major investor in Britain.
Varley, the bank’s former chief executive; Jenkins, a former tax advisory boss; Kalaris, the ex chief executive of Barclays’ wealth division and Boath, former European head of financial institutions, have been charged with conspiracy to commit fraud by false representation during a June 2008 capital raising.
Varley and Jenkins have also been charged with conspiracy to commit fraud by false representation in relation to the second capital raising in October 2008 and Varley and Jenkins face another charge of unlawful financial assistance, the SFO said.
The SFO’s investigation centred on commercial agreements between Barclays and Qatari investors during two emergency fund raisings in June and October at the height of the credit crisis.
Qatar Holding, part of the Qatar Investment Authority sovereign wealth fund, and Challenger, an investment vehicle of former Qatari prime minister Sheikh Hamad bin Jassim bin Jabr al-Thani, invested around £5.3bn in Barclays.
Authorities have examined whether payments from Barclays to Qatar at the same time, such as around £322m in “advisory services agreements”, alongside a multi-billion dollar loan, were honest and properly disclosed.
Qatar, meanwhile, has made a healthy profit from its investment and remains Barclays’ biggest shareholder. The Gulf state has not been accused of wrongdoing.