Barclays’ legal difficulties deepened on Monday when Britain’s Serious Fraud Office (SFO) charged its operating subsidiary with providing unlawful financial assistance to Qatari investors during the banking crisis a decade ago.
Barclays denies the SFO's allegation that a $3 billion loan made to Qatar in November 2008 was connected with a Qatari investment in the British bank during the financial crisis which helped it avoid turning to the British government for a bailout.
Public companies in Britain are normally prohibited from lending money for the purchase of their own shares, a process known as financial assistance.
The SFO levelled the same charge against the bank’s holding company last June, but it is the operating unit, Barclays Bank plc, that is licensed for banking operations, meaning any conviction could also prompt sanctions from regulators.
"The defences to this offence are quite narrow and the SFO may believe that the bank will struggle to identify and prove a good faith purpose," Michael Potts, a partner at law firm Byrne and Partners, said. – Reuters
