Charges brought against Barclays bank over a $3bn loan made to Qatari investors have been thrown out by a court, in a major setback for the Serious Fraud Office.
The charges related to the £11.8bn emergency fundraising conducted by the bank in 2008 as it struggled to maintain its independence and avoid a government takeover. However, charges against the bank’s former chief executive and other top managers remain in place.
The Qatari investment that helped prop up the bank has been mired in controversy, and after a five-year investigation the SFO last summer brought charges of conspiracy to commit fraud against Barclays and former senior executives.
But in a statement issued to the stock market on Monday the bank said: “Barclays announces that the crown court has today dismissed all charges brought by the Serious Fraud Office against Barclays plc and Barclays Bank plc regarding matters which arose in the context of Barclays’ capital raisings in 2008.”
However, the charges dismissed by the court only involve Barclays as a corporate entity. The charges made by the SFO against the individuals – the former chief executive John Varley and other top executives Roger Jenkins, Thomas Kalaris and Richard Boath – still stand and proceedings remain live in their cases.
Barclays also admitted its court battle with the SFO is unlikely to be over, noting that “the SFO is likely to seek to reinstate these charges by applying to a high court judge to recommence proceedings via a new indictment of the same charges”.
The bank added in the statement that the crown court dismissal of the case “should not be taken to indicate any finding on the issue of whether a criminal offence has or may have been committed by other persons”.
The SFO said it was digesting the result of the court hearing and would respond soon. It said in a statement: “We are considering our position in respect of today’s ruling concerning the companies.”
Barclays declined to comment beyond its statement to the stock market, but the case dismissal will be a major relief to a bank that has been plagued by legal and regulatory problems.
The charges dismissed on Monday include two charges of “conspiring with certain former senior officers and employees of Barclays to commit fraud by false representations”.
The other charges dismissed were against Barclays plc and Barclays Bank plc for “unlawful financial assistance contrary to section 151(1) of the Companies Act 1985 in relation to a $3bn loan provided to the State of Qatar in November 2008”.
The distinction between Barclays plc and Barclays Bank plc, the lender’s operating company, was important, as the bank’s licences and regulatory approvals are held at the operating level.
The charges against Barclays were the first criminal charges to be brought in the UK against a bank for activities during the financial crisis.
Andrew Katzen, a partner at lawyers Hickman & Rose said: “The SFO’s most high-profile corruption prosecution has fallen at the first hurdle, but Barclays isn’t off the hook yet. The SFO is almost certain to seek to continue the prosecution by applying to the high court to issue what is called a voluntary bill of indictment.
“Nevertheless, the ruling makes for an inauspicious start for the prosecutor as it awaits its new director.”
David Green stepped down as director of the SFO last month and the organisation’s chief operating officer, Mark Thompson, has been appointed interim head.
Earlier this month in an unconnected case, the Barclays chief executive, Jes Staley, was ordered to hand over more than £1.1m out of his own pocket as punishment for attempting to unmask a whistleblower.
Staley was fined a total of £642,430 by the Financial Conduct Authority and the Prudential Regulation Authority, and Barclays has clawed back £500,000 of his bonus over the matter.
