Posted on August 29, 2012

UK fraud prosecutors could open a criminal investigation as soon as this week into payments Barclays made to Qatar’s sovereign wealth fund in 2008, it was reported on Wednesday.

Bloomberg quoted two people familiar with the case as saying that the Serious Fraud Office may inform the bank about its decision on a probe this week.

It said prosecutors are working with the UK Financial Services Authority, which is conducting a civil investigation into whether the bank adequately disclosed fees it agreed to pay the Qatar Investment Authority as it looked to raise funds in 2008.

The fees were payable under commercial agreements related to deals in June and November 2008. It agreed to get advisory services from Qatar Investment Authority and explore a relationship with Japan's Sumitomo Mitsui Banking Corp.

Qatar Airways Network

Barclays raised £4.5bn in June 2008, including from SMBC, followed by a £7bn cash call in November that year from Qatar and Abu Dhabi investors to avoid taking a government bailout. The bank has said it paid £300m in fees on the latter deal, including about £116m to Qatar Holding and £110m to Sheikh Mansour Bin Zayed al Nahhan, a member of Abu Dhabi's royal family.

“The FSA is investigating the sufficiency of disclosure in relation to fees payable under certain commercial agreements and whether these may have related to Barclays capital raisings in June and November 2008,” the lender said in a statement on July 27.

The investigation would be another legal pitfall for Britain’s second-biggest lender by assets after it paid US and UK authorities $459m in June for manipulating the London interbank offered rate, also known as Libor.

SFO spokesman David Jones, Barclays spokesman John McGuinness and a spokesman for the QIA declined to comment, Bloomberg said. Barclays said last month that four current and former senior employees were being investigated by the regulator.

source: Arabian Business