Barclays Qatar Targets Said to Make Last Plea Before Charges

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  • U.K. prosecutors to decide on 2008 fundraising case in weeks
  • Barclays executives make final petitions to avoid charges

Former Barclays Plc executives sent final pleas to the U.K. Serious Fraud Office arguing they shouldn’t face prosecution related to a 2008 fundraising campaign involving Qatar, as the agency prepares to announce whether it will charge anyone in the probe, according to people with knowledge of the matter.

In recent weeks, several suspects have contacted the SFO outlining why they shouldn’t be charged, said the people, who asked not to be identified because the letters are private. At least eight former senior officials have been treated as suspects. The SFO told a London court last year that it would decide on charges by the end of March, and the prosecutor is on track to make an announcement around then, three of the people said.

The five-year-old investigation is into two "advisory services agreements" worth 322 million pounds ($391 million) that Barclays committed to pay the Qatar Investment Authority during the 2008 financial crisis. The pacts came around the same time the sovereign wealth fund joined a two-stage 12 billion-pound fundraising to help the bank avoid a state bailout, raising questions about the true purpose of the services agreements.

Under Caution

In 2014, the SFO interviewed about a dozen current and former executives under caution including former Chief Executive Officers John Varley and Bob Diamond, ex-Chief Financial Officer Chris Lucas, former chairman of investment banking for the Middle East Roger Jenkins, ex-General Counsel Mark Harding, former investment banking General Counsel Judith Shepherd, ex-Wealth Chief Thomas Kalaris and Richard Boath, ex-deputy head of investment banking.

Interviews under caution are generally conducted with possible suspects and anything said can be used in court.

Most were interviewed under caution for a second time late last year after the bank ended a long-running dispute with prosecutors and turned over thousands of internal documents it had previously claimed were covered by attorney-client privilege.

Lawyers and spokesmen for those interviewed either declined to comment or didn’t immediately respond to requests for comment on the SFO representations. A spokeswoman for the SFO declined to comment, as did a spokesman for Barclays.

Key Question

One key question is whether Barclays as a corporate entity will be prosecuted and, if so, whether a settlement could be reached. A so-called deferred prosecution agreement allows a company to avoid prosecution in exchange for terms such as paying a fine and assisting in the prosecution of individuals. To prosecute the bank, the SFO would have to prove a senior executive -- or the “controlling mind” -- was involved in the criminality, which usually requires charging a board-level individual.

To be eligible for a DPA, a company must also meet a number of conditions including fully cooperating with authorities. Barclays’s dispute over legal privilege could be an example of behavior that may raise questions about its eligibility.

The SFO notified the court of the timetable for charging decisions at a hearing last year in a related civil lawsuit brought by investment firm PCP Capital Partners. PCP, which is run by Amanda Staveley, is suing Barclays for 721 million pounds ($880 million) claiming "fraudulent misrepresentation and deceit" in relation to the capital raising. Barclays is fighting the claim.

Barclays was fined 50 million pounds by the U.K. Financial Conduct Authority in 2013 for failing to adequately disclose the Qatar payments. Barclays is contesting the FCA findings, which have been put on hold pending the outcome of the SFO investigation.