Barclays under criminal probe over Qatar fund

PUBLISHED : Friday, 31 August, 2012, 12:00am
UPDATED : Friday, 31 August, 2012, 3:18am

Barclays faces a criminal probe into fees it paid in 2008 to Qatar's sovereign wealth fund as the bank sought to raise money to avoid a government bailout.

The British Serious Fraud Office, which prosecutes bribery and white-collar crime, told the London-based bank it had "commenced an investigation into payments under certain commercial agreements between Barclays and Qatar Holding", the lender said yesterday.

The investigation is another legal pitfall for Britain's second-biggest lender by assets after it paid United States and British authorities a record £290 million (HK$3.56 billion) in June for manipulating the London interbank offered rate, or Libor, and related interest benchmarks. The case led to the resignations of three top Barclays executives, including chief executive Robert Diamond.

Barclays has named Antony Jenkins as its chief executive, promoting the head of its consumer banking business.

Prosecutors are working with the Financial Services Authority (FSA), Britain's finance regulator, which is conducting a civil investigation into whether the bank adequately disclosed fees it agreed to pay the Qatar Investment Authority (QIA), according to a person familiar with the matter who asked not to be identified because the discussions between the agencies were confidential.

Serious Fraud Office spokesman David Jones and a spokesman for the QIA declined to comment.

Barclays disclosed the FSA probe into the payments last month and said that four present and former senior employees were being investigated.

The Qatar payments probe follows a series of global investigations into wrongdoing at some of Britain's biggest banks.

Standard Chartered agreed two weeks ago to pay US$340 million to settle allegations by New York's banking superintendent that it laundered US$250 billion for Iran. HSBC, which is under investigation by US regulators for laundering funds of sanctioned nations including Iran and Sudan, is in talks to settle the matter, people familiar with the case have said. The bank has set aside US$700 million for any US fines.

At least seven banks are under civil investigation by the FSA for attempts to manipulate Libor and the Serious Fraud Office opened a criminal probe into the matter last month.

Barclays admitted to attempting to rig rates to benefit its derivatives trades and to appear healthier during the financial crisis.