Britain’s Serious Fraud Office on Tuesday charged Barclays and four former top officials with “conspiracy to commit fraud” in connections with its investments from Qatar during the 2008 financial crisis, reported Reuters. With this, Barclays became the first bank to face criminal charges over its action taken during the global financial meltdown.
The 2007-2008 economic crisis was considered by many to be the worst financial meltdown since the Great Depression in the 1920s. Barclays CEO at the time, John Varley, former senior investment banker Roger Jenkins, ex-chief executive of Barclays’ wealth division Thomas Kalaris and former European head of financial institutions Richard Boath have been asked to appear before the Westminster Magistrates’ Court on July 3, BBC reported. If convicted, the top executives will face 10 years of prison term and a fine for the bank. Jenkins and Boath have said they will contend the charges.
The emergency funds worth £12 billion (approximately Rs 1.18 lakh crore) from Qatar had allowed Barclays to avoid a government bailout in 2008, The Guardian reported. This came after its rivals – Royal Bank of Scotland and Lloyds – had to pay billions in British taxpayers’ money. “The charges relate to Barclays Plc’s capital raising arrangements with Qatar Holding LLC and Challenger Universal Ltd, which took place in June and October 2008,” the SFO said in a statement, according to AFP.
The bank and the four executives have been accused of false representation while raising the capital. Besides, former CEO Varley and ex-senior investment banker Jenkins have also been accused of unlawful financial assistance. Apart from the fundraising in June and October 2008, the SFO is also investigating a $3-billion (more than Rs 18,000 crore) loan that Barclays made available to Qatar in November 2008.
The global financial meltdown had started with a crisis in the United States subprime mortgage market, followed by the collapse of investment bank Lehman Brothers in 2008. However, it began to recede quickly, around June 2009.