Barclays faces fraud investigation into Qatar payments

Written on:August 30, 2012
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Barclays branch in London

Has Barclays faltered again?

Barclays is again at the helm of a new scandal as the Serious Fraud Office (SFO) has launched an investigation into the suspicious payments made by Middle Eastern investor Qatar Holdings to Barclays in 2008.

The inquiry comes just a month after Barclays was entangled in Libor rate-rigging scandal where the company had to relinquish chief executive Bob Diamond and chairman Marcus Agius apart from being charged with a £290 million fine by the US and the UK regulators.

In July, Barclays had confirmed that the FSA had begin a separate inquiry into the fundraising issue when its finance director Chris Lucas, was one of four current and past employees, who came under scanner. The bank said that it had fully cooperated with the FSA probe and had satisfied its disclosure obligations.

The SFO investigation will be more in-depth and is said to run alongside the FSA probe, which has no rights of investigation apart from insider trading and share scams.

In June 2008, Barclays raised £4.5 billion with the help of issue of new shares. In November, the bank raised more than £7 billion. The focus of the investigation is on the advisory services agreement provided by Qatar Holdings to Barclays in the Middle East.

The fund raised in June involved an agreement with Japan’s Sumitomo Mitsui Banking Corporation “to explore opportunities for a co-operative business relationship”, for which the fees came to be a whooping £100 billion. In November 2008 fund raising, Barclays disclosed five fees which totalled to £300 million.

A unit of Qatar Investment Authority, Qatar Holding, is Barclay’s largest shareholder, holding 6.65% stake in the bank.

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