Barclays beats SFO in Crown Court over Qatar loan

The Crown Court has dismissed fraud charges brought by the Serious Fraud Office against Barclays over the bank's emergency fundraising deal with Qatar at the height of the financial crisis.

The SFO, however, is likely to seek to re-instate these charges by applying to a High Court Judge to re-start proceedings via a new indictment of the same charges.

Barclays' core banking business, Barclays Bank Plc, was charged by the SFO in February, after parent holding company Barclays Plc and four former executives were hit with charges last June. The charges of conspiracy to commit fraud relate to the emergency cash call secured from Qatar in 2008, including an offence of unlawful financial assistance in relation to the $3bn loan provided Qatar in November 2008.

On Monday, Westminster Magistrates’ Court dismissed charges against Barclays Plc over conspiring with certain former senior officers and employees to commit fraud by false representations over advisory services agreements entered into with Qatar Holding LLC in June and October 2008. Furthermore the court also threw out the unlawful financial assistance charges against Barclays Plc and Barclays Bank Plc.

In the summer of 2008, a few months after Bear Stears collapsed and another few before Lehman Brothers went under, Barclays successfully raised £4.5bn of capital, followed by a further £7.3bn just a few months afterwards from various investors including the state of Qatar, which allowed it to avoid having to go cap-in-hand to the taxpayer as rivals Lloyds and RBS were forced to do.

According to separate court documents, Barclays then loaned back funds to the state of Qatar just weeks after announcing the fundraising deal was of the same amount as the debt component of the Qatar Holding’s investment.

Under the Companies Act 1985, it is unlawful for a bank to lend itself money — the legal term for which is financial assistance.

Although not initially disclosed until after the capital was raised, Barclays subsequently revealed that it paid about £322m in "commission payments" to Qatari investors, which was argued by analysts be an overly generous encouragement for hugely rich investors to buy debt that was paying a 14% rate of interest until June 2019.