Barclays, Four Former Top Executives Charged With Fraud Over Fundraising With Qatari Investors

By Max Colchester Features Dow Jones Newswires

The U.K.'s Serious Fraud Office on Tuesday filed criminal charges against Barclays PLC and four former top executives linked to their handling of Middle Eastern investments that rescued the bank at the height of the financial crisis.

Continue Reading Below

The SFO charged the individuals and the bank with conspiracy to commit fraud. Two individuals, including its former Chief Executive John Varley, were also charged with the provision of unlawful financial assistance.

The allegations center on how Barclays structured two capital injections from Qatari investors as the bank raised GBP11.8 billion to prop it up during the 2008 financial market meltdown. Barclays said it paid GBP322 million in "advisory services" to Qatari investors, which wasn't initially disclosed after the capital was raised.

The SFO also said it was scrutinizing a $3 billion loan facility Barclays made to the State of Qatar acting through the Ministry of Economy and Finance in November 2008, just before its second capital raise.

Unlike its peers Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC, the Middle Eastern equity injections meant Barclays was able to avoid a bailout by British taxpayers.

Barclays said it is considering its position in relation to the SFO's announcement.

Continue Reading Below

The SFO's case involves a cadre a Barclays top executives who steered the bank at the time.

The prosecutor accused Mr. Varley, who was the bank's chief executive between 2004 and 2011, of conspiracy to commit fraud and unlawful financial assistance. Roger Jenkins, who played a key role in orchestrating the capital raise when acting as chairman of Barclays' investment banking and investment management in the Middle East, was also accused of conspiracy for fraud and unlawful financial assistance. Thomas Kalaris, who used to run the bank's wealth division, was charged with conspiracy to commit fraud. Richard Boath, a former senior executive at the investment bank, was accused of conspiracy to commit fraud.

Under U.K. law, when the men appear at the magistrate's court, they will have the option to enter a plea. Any bail conditions will be set and prosecutors will give a brief synopsis of their case. Magistrates then decide which court will hear it. They will appear before a court in London on July 3.

Write to Max Colchester at max.colchester@wsj.com

(END) Dow Jones Newswires

June 20, 2017 03:05 ET (07:05 GMT)