Realist, not conformist analysis of the latest financial, business and political news

That Qatar Fundraising Was Fine – Barclays Not To Be Charged

It would appear that the saga is over. Barclays is not to be charged over the Crash induced refinancing they gained from Qatar. That would seem to imply that they didn’t do what some suspected, round trip the money. Thus this is the end – barring any appeals:

Barclays has been spared a court trial over its emergency fundraising during the global financial crisis.

The High Court has dismissed a claim by the Serious Fraud Office (SFO) to reinstate charges against the bank.

The Serious Fraud Office has definitely tried to be able to gain a trial over the matter. But it would appear that there’s not enough evidence to take it that far:

A High Court judge has denied a Serious Fraud Office application to charge Barclays over its 2008 capital raising, potentially ending the biggest remaining legal headache facing the British bank over its conduct during the financial crisis.

A decade on that does rather put the whole thing to bed.

The Serious Fraud Office applied to a High Court judge this week after a judge in a lower court dismissed all charges against the bank in the SFO’s case over the 2008 capital-raising. Barclays twice turned to Middle Eastern investors that year to stay out of the control of the UK government as other high-street rivals were bailed out.

But in what amounts to a get-out-of-jail card for Barclays, Lord Justice Davis rejected the SFO’s application for a so-called voluntary bill of indictment.

The ruling is a blow for the SFO in one of its flagship cases that has taken more than five years to investigate, with the help of special Treasury funding in the millions of pounds. The decision also raises questions over the ability of UK prosecutors to hold large corporates to account.

Well, yes and no, yes and no.

It’s not illegal to go and find investors when your bank is in trouble. In fact that’s generally viewed as a very good thing. The bank’s in danger of going insolvent as a result of losses, bring in some more capital so that it doesn’t.

It’s not illegal to reject the government’s tender embrace to do this and go and find private investors instead.

It’s not even illegal to take Arab money to do this. No, not even from an Arab monarchy sitting high on oil and gas money.

However, what would be illegal is round tripping the investment. To say, guys, here, we’ll lend you £20 billion or some such sum. Then you spend that £20 billion on buying our shares. For that would be to turn a deposit at Barclays into capital at Barclays – very naughty indeed. And there have been some who say that is what was done. The SFO at least wanting to take such an allegation to trial. And as far as we can see at least the courts saying there’s not even enough evidence for a trial, let alone a conviction.

The assumption from here on in is that the Barclays fundraising from Qatar was ticketty boo. Or, as we might put it, the least bad of the British banks was able to find a private sector solution to that Crash. The least bad being shown by that finding of the private sector solution.

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