Barclays has been charged a second time by UK authorities over its 2008 emergency fundraising, raising the stakes for the British bank in its legal battle over the cash injections it arranged from Qatari investors to survive the financial crisis.
The UK’s Serious Fraud Office, which had already brought criminal charges against Barclays’ parent company and four former senior executives, has brought a single charge of unlawful financial assistance against Barclays Bank, one of its main operating subsidiaries.
The move ratchets up the pressure on Barclays because the latest charge is at the same level of the group’s organisational structure at which banking licences and regulatory authorisations are issued. Those are dependent on the financial regulator deeming the company “fit and proper”.
Barclays said in a statement: “Barclays plc and Barclays Bank plc intend to defend the respective charges brought against them. Barclays does not expect there to be an impact on its ability to serve its customers and clients as a consequence of the charge having been brought.”
The latest charge relates to the $3bn loan that Barclays made to the state of Qatar in November 2008, around the time that the second of the bank’s two rescue fundraisings was closing. British companies are usually barred from lending money if the purpose is to fund the purchase of their own shares, a process known as financial assistance.
It is rare for banks to face criminal charges in the UK, making it hard to predict how Barclays could be affected if convicted. Several banks have entered guilty pleas in the US for manipulating markets, assisting tax evasion and breaching sanctions and none lost their licence, although France’s BNP Paribas had part of its licence suspended for a year.
The SFO has been considering the additional action against Barclays Bank since it first charged the parent company and some of its former executives with fraud last June. That may have been an attempt to pressure the bank to enter a guilty plea.
