City watchdogs are collaborating with the Serious Fraud Office (SFO) as part of an investigation into Barclays' bailout by the Middle East, i has learnt. This could lead to an investigation being launched by the fraud policing agency.
Barclays announced at the end of last month that its finance director Chris Lucas was one of four "current and former" employees under investigation by the Financial Services Authority (FSA). The inquiry is focused on the disclosures of commission payments made by Barclays to secure the bailout funds which were raised in two tranches in 2008. The FSA is understood to be liaising with a number of other regulators as part of the inquiry, including the SFO. However, the SFO has yet to decide whether it will launch a formal investigation of its own.
The news came as a rival bank, Standard Chartered, launched a fightback after being dubbed a "rogue institution" by the New York State Department of Financial Services. On Monday it alleged the bank broke sanctions against Iran. Shares in Standard Chartered, which has vowed to contest the charges, finished up 87.27p at 1315.5p amid supportive comments by analysts and the Bank of England Governor Sir Mervyn King.
Against a backdrop of increasing unease in Whitehall over what some see as political attacks on British banks from across the Atlantic, it emerged that George Osborne has questioned the approach of American regulators to Standard Chartered in a call to the US Treasury Secretary, Timothy Geithner.
Barclays first raised £4.5bn from investors including Qatar and Sumitomo, a Japanese bank, in June 2008 followed by a further £7.1bn from Qatar, Abu Dhabi and its own shareholders in November. The funds meant that it was able to shore up its balance sheet during the financial crisis. But the cash calls annoyed shareholders who were cut out of what were seen as very favourable terms. And the commissions paid also caused controversy.
Last night John Mann, the Labour member of the Treasury Select Committee who is conducting an investigation into the banking industry, welcomed the news of the SFO's interest but criticised the agency for playing "catch-up".
Neither the FSA nor the SFO was prepared to comment yesterday. Barclays said it was not in a position to comment. It is not believed to have been informed of the SFO's interest. No suggestion of impropriety has been levelled at the investors who provided the funds to Barclays. The focus of the FSA's probe is, however, thought to be on the Qatari end of the deals.Reuse content