Fraud charges against Barclays over Qatar deals

Arab News
June 21, 2017

Dubai, Jun 21: Qatar’s 2008 bailout of Barclays has come back to haunt the British banking giant, with the leveling of fraud charges against it and four former senior executives over multibillion-pound deals nine years ago.

Barclays

The Serious Fraud Office (SFO), the UK’s top financial prosecutor, announced charges as Qatar’s financial sector showed signs of further strain under the weight of sanctions brought to bear by a coalition of neighboring countries including Saudi Arabia and the UAE.

It has for months been considering action over the undisclosed terms of £6.1 billion ($7.7 billion) worth of deals that saw Qatari investors buy shares to prop up the bank at the height of the global financial crisis, after an investigation that began in 2012.

The SFO on Tuesday announced charges of conspiracy to commit fraud and provision of unlawful financial assistance against the Barclays parent company and four executives who were at the heart of the deals.

The highest profile is John Varley, former group chief executive, who becomes the first boss of any global bank to face criminal charges as a result of the 2008 crisis, which sparked a global crash and recession.

The others were well-known deal-doers at the bank: Roger Jenkins, former chairman of investment banking in the Middle East; Thomas Kalaris, former head of wealth and investment management; and Richard Boath, former head of financial institutions in Europe.

The SFO charges named Qatar Holding, one of the troubled country’s investment vehicles and Challenger Universal, an investment unit set up by former Qatari Prime Minister Hamad bin Jassim Al-Thani, as counterparties to the deals but no British criminal actions have been brought against any Qatari citizens.

Separately, Qatari bankers on Tuesday reported that the Qatar Investment Authority (QIA), its main sovereign wealth fund, made billions of dollars worth of deposits in local banks in an effort to head off any liquidity crisis as fears grew in the country that the current blockade by its neighbors might spark a run on financial institutions there.

In 2008, Barclays was facing its own liquidity crisis as the strains of the global financial crisis weighed on all the big British banks. Some were forced to swap their independence for government bailout funds to avoid bankruptcy.

Barclays, under Varley, chose instead to seek assistance from the Arabian Gulf in a set of transactions that brought in billions of pounds of capital. The first tranche involved investors in Qatar and in Abu Dhabi, the second just Doha investors.

Barclays agreed to pay Qatari investors £322 million in return for the capital injections in side deals that were not disclosed at the time and which the SFO alleges amounted to fraud. There are no allegations against the Abu Dhabi investor.

A third transaction in 2008 involved Barclays making available a loan of $3 billion to Qatar, which the SFO alleges amounted to unlawful financial assistance.

Barclays said it was considering its position in relation to the charges. “Barclays awaits further details of the charges from the SFO,” it said.

The former executives either declined to comment or professed their determination to fight the charges. Jenkins’ lawyer said he intended to vigorously defend against the charges. “As one might expect in the challenging circumstances of 2008, Mr. Jenkins sought and received both internal and external legal advice on each and every aspect of the accusations leveled today by the SFO,” he told the Financial Times.

Boath is involved in a separate action against the bank in a claim for wrongful dismissal over information he provided the SFO in the course of their investigation.

Barclays is also fighting a £720 million claim from financier Amanda Staveley, who was involved in the 2008 transactions.

The charges come at a politically sensitive time for both Qatar and the UK. The former is resisting pressure from its neighbors in the Gulf to halt alleged support for terrorist organizations, which has led to the cutting of economic ties with its two biggest neighbors, Saudi Arabia and the UAE.

On the liquidity measures taken recently, the Qatar Central Bank (QCB) told Reuters: “QIA regularly places deposits in local banks, this is normal.”

Qatar is also a big investor in Britain, with extensive real estate interests and ownership of high-profile assets like the Harrods department store.

Britain, seeking to make up lost investment in the wake of the impending withdrawal from the EU, has made no secret of its need for stronger investment links with the Gulf.

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Gulf News
April 12,2020

Hyderabad, Apr 12: In the backdrop of rising tide of anti-Muslim hatred and Islamophobia on the social media, a company in Dubai sacked an employee from Hyderabad for his hate-filled posts on Facebook.

Bala Krishna Nakka from Hyderabad, who was working as Chief Accountant at Dubai’s Moro Hub Data Solutions Company, was sacked after his Facebook went viral evoking widespread condemnation. The man had posted images on his Facebook page which showed Muslims as suicide bombers wearing bombs in the form of coronavirus cells.

It triggered demands both on Facebook and Twitter for action against him. In a quick response the company announced that the person was being sacked from his job, as the company had zero tolerance towards hate propaganda.

Moro Hub said in a statement: “At Moro, we take a zero tolerance attitude to material that is or may be deemed Islamophoic or hate speech. The tweets that we have been alerted to do not, in any way, reflect Moro’s brand values.”

Since the outbreak of coronavirus in India, a more intense hate propaganda has been unleashed by right wing elements on social media targeting India’s Muslim minority, some of whom are based in Gulf region.

As both the mainstream media, especially Indian TV channels, as well as social media users, have unleashed a campaign linking the spread of virus to a Muslim missionary organisation, the Tableeghi Jamaat, in India, a fresh war of words has broken out on social media.

While some activists have taken up it on themselves to highlight the hate propaganda and draw the attention of employers to such hate mongers, the right wing social media handles have also launched their own counter-offensives against such activists.

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News Network
April 29,2020

Dubai, Apr 29: Dubai on April 23 was a suicide, Dubai Police confirmed to Gulf News on Wednesday.

According to Dubai Police, he committed suicide by jumping from a building in Business Bay.

“We received a report about a man plunging to his death from the 14th floor of a friend's building on Thursday. The businessman committed suicide over financial problems,” Brigadier Abdullah Khadim Bin Sorour, director of Bur Dubai Police Station, told Gulf News.

Joy Arakkal receiving the Lifetime Achievement Award from Kerala Chief Minister Pinarayi Vijayan

The police ruled out any criminal suspicion behind the suicide and said they are coordinating with the businessman’s family for the repatriation of his body.

A UAE Gold Card visa recipient, Arakkal was the managing director of Dubai-headquartered Innova Group of Companies which had diverse businesses, with major focus in the oil sector. He is survived by his wife Celine and children, Arun and Ashly, who live in Jumeirah.

Consul General of India in Dubai Vipul confirmed to Gulf News that Arakkal’s family is set to fly home with his body after Indian authorities gives them special permission to travel in a chartered air ambulance.

“They have received the NOCs (No Objection Certificates) from India. We have taken it up with the UAE MoFAIC (Ministry of Foreign Affairs and International Cooperation) for necessary permits from the UAE side,” Vipul said.

Once the approval is received, a chartered air ambulance will fly in from Bangalore to carry the family and the mortal remains of Arakkal.

Quiet embalming service

A few social workers and community leaders, who were coordinating with Arakkal’s family for the repatriation procedures, attended the embalming service was on Tuesday.

“Only the family members and a few of his employees were present apart from us,” said advocate Hashik T.K.

He said M.K. Raghavan, a member of Indian parliament from Kerala, and R. Harikumar of Elite Group in the UAE, offered great support for securing approvals from Indian authorities.

“We have been requesting the central and state governments to consider the emotional aspect of traditional funeral process in the case of expats who die abroad.”

He said almost two dozen bodies have been flown to India in the past few weeks on cargo flights. But, no family member was allowed to accompany the bodies so far.

Besides Arakkal’s family, the Indian government also issued immigration clearance for the family of a cancer patient from Nottingham, who is seeking treatment, to fly down to Calicut International Airport in Kerala.

Quarantine and funeral
On reaching Kerala, the family members would follow the quarantine procedures as per the government rules, Hashik said.

Arakkal’s’s funeral will be held in his hometown in Mananthavady in Wayanad district where he had built a 45,000sqfit mansion, one of the biggest houses in Kerala, last year.

“It is sad that he could stay in that house for a month or so only,” said a community member.

He said Arakkal had built houses for the poor and also funded the weddings of several young couples back home.

His companies include oil refineries, petrochemical trading, ISO tank cleaning services, shipping services and a telecom company working for infrastructure projects in the UAE.

He had received many awards including a lifetime achievement award from the Chief Minister of Kerala Pinarayi Vijayan during his visit to Dubai.

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News Network
July 1,2020

Riyadh, Jul 1: Saudis braced Wednesday for a tripling in value added tax, another unpopular austerity measure after the twin shocks of coronavirus and an oil price slump triggered the kingdom's worst economic decline in decades.

Retailers in the country reported a sharp uptick in sales this week of everything from gold and electronics to cars and building materials, as shoppers sought to stock up before VAT is raised to 15 percent.

The hike could stir public resentment as it weighs on household incomes, pushing up inflation and depressing consumer spending as the kingdom emerges from a three-month coronavirus lockdown.

"Cuts, cuts, cuts everywhere," a Saudi teacher in Riyadh told AFP, bemoaning vanishing subsidies as salaries remain stagnant.

"Air conditioner, television, electronic items," he said, rattling off a list of items he bought last week ahead of the VAT hike.

"I can't afford these things from Wednesday."

With its vast oil wealth funding the Arab world's biggest economy, the kingdom had for decades been able to fund massive spending with no taxes at all.

It only introduced VAT in 2018, as part of a push to reduce its dependence on crude revenues.

Then, seeking to shore up state finances battered by sliding oil prices and the coronavirus crisis, it announced in May that it would triple VAT and halt a cost-of-living monthly allowance to citizens.

The austerity push underscores how Saudi Arabia's once-lavish spending is becoming a thing of the past, with the erosion of the welfare system leaving a mostly young population to cope with reduced incomes and a lifestyle downgrade.

That could pile strain on a decades-old social contract whereby citizens were given generous subsidies and handouts in exchange for loyalty to the absolute monarchy.

The rising cost of living may prompt many to ask why state funds are being lavished on multi-billion-dollar projects and overseas assets, including the proposed purchase of English football club Newcastle United.

Shopping malls in the kingdom have drawn large crowds in recent days as retailers offered "pre-VAT sales" and discounts before the hike kicks in.

A gold shop in Riyadh told AFP it saw a 70 percent jump in sales in recent weeks, while a car dealership saw them tick up by 15 percent.

Once the new rate is in place, businesses are predicting depressed sales of everything from cars to cosmetics and home appliances.

Capital Economics forecast inflation will jump up to six percent year-on-year in July, from 1.1 percent in May, as a result.

"The government ended the country's lockdown (in June) and there are signs that economic activity has started to recover," Capital Economics said in a report.

"Nonetheless, we expect the recovery to be slow-going as fiscal austerity measures bite."

The kingdom also risks losing its edge against other Gulf states, including its principal ally the United Arab Emirates, which introduced VAT at the same time but has so far refrained from raising it beyond five percent.

"Saudi Arabia is taking massive risks with contractionary fiscal policies," said Tarek Fadlallah, chief executive officer of the Middle East unit of Nomura Asset Management.

But the kingdom has few choices as oil revenue declines.

Its finances have taken another blow as authorities massively scaled back this year's hajj pilgrimage, from 2.5 million pilgrims last year to around a thousand already inside the country, and suspended the lesser umrah because of coronavirus.

Together the rites rake in some $12 billion annually.

The International Monetary Fund warned the kingdom's GDP will shrink by 6.8 percent this year -- its worst performance since the 1980s oil glut.

The austerity drive would boost state coffers by 100 billion riyals ($26.6 billion), according to state media.

But the measures are unlikely to plug the kingdom's huge budget deficit.

The Saudi Jadwa Investment group forecasts the shortfall will rise to a record $112 billion this year.

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