LONDON: Four former senior executives of Barclays, the British banking group, will stand trial for conspiring to commit fraud over the 2008 fundraising that brought in Qatar institutions as shareholders, a hearing in London decided on Monday.
A judge at Southwark Crown Court in the UK capital set a date in January 2019 for the trial, which will be the first time any British bank executives have been held responsible for alleged crimes committed during the global financial crisis. The trial is expected to last 16 weeks.
Last month, the Serious Fraud Office (SFO), the British investigating body responsible for prosecuting large-scale financial crimes, said that it was accusing the men, and the Barclays holding company, for conspiracy to commit fraud.
Former Barclays Chief Executive Officer John Varley, Roger Jenkins, former head of Middle East business, Thomas Kalaris, former head of wealth and investment management, and Richard Boath, former head of European financial institutions were charged with fraud conspiracy for their part in fundraisings that brought in a total £12 billion ($15.7 billion) from Qatari and other financial institutions.
Qatar put up most of the cash injections in 2008 at £6.3 billion, and is still a big holder of the group’s shares, with 6 percent of the total.
Varley and Jenkins, and the Barclays holding company, were also charged with providing unlawful financial assistance to Qatari institutions. The bank holding company paid Qatari investors £322 million in fees and provided a $3 billion loan facility at the same time.
Barclays wanted the cash to save it from having to take money from the British government, which would have involved a loss of independence and controls over its ability to pay big bonuses to its executives.
At an earlier hearing, the four men indicated that they would be pleading not guilty to the charges. Barclays said it was reserving judgment on how to plead in the case.
There has been speculation that the SFO might also charge the operating company, Barclays Bank, with charges relating to the events in 2008.
There have been no charges against the two Qatari institutions which bought the Barclays shares: The sovereign wealth fund Qatar Holding and Challenger Universal, a special-purpose vehicle set up to hold investments on behalf of Sheikh Hamad Bin Jassim bin Jabr Al-Thani, then-prime minister of Qatar and his family.
Barclays, former execs to face 2019 trial in Qatar fundraising case
Barclays, former execs to face 2019 trial in Qatar fundraising case
Global brands shut Middle East stores as conflict causes chaos
- Luxury brands and retailers close stores in Middle East
- Conflict threatens the region that has been luxury’s fastest growing
- Mass-market retailers monitor situation, adjust operations in region
PARIS: In Dubai and other major Middle Eastern shopping hubs, many stores are closed or operating with a skeleton staff as the escalating conflict in the region causes chaos for businesses and travel.
The US-Israeli air war against Iran expanded on Monday with no end in sight, with Tehran firing missiles and drones at Gulf states as it retaliates for a weekend of bombing that killed Iran’s supreme leader and reportedly killed scores of Iranian civilians, including a strike on a girls’ primary school.
Chalhoub Group, which runs 900 stores for brands from Versace and Jimmy Choo to Sephora across the region, said its stores in Bahrain were closed, while other markets, including the UAE, Saudi Arabia, and Jordan remained open though staff attendance was “voluntary.”
“We operate with a lean team formed of members who volunteered and feel comfortable to come to the store,” Chalhoub’s Vice President of Communications Lynn al Khatib told Reuters, adding that the company’s leadership team personally visited Dubai Mall and Mall of the Emirates on Monday morning to check in with workers.
E-commerce giant Amazon closed its fulfillment center operations in Abu Dhabi, suspended deliveries across the region and instructed its employees in Saudi Arabia and Jordan to remain indoors, Business Insider reported on Monday, citing an internal memo.
Gucci-owner Kering said its stores were temporarily closed in the UAE, Kuwait, Bahrain and Qatar and it has suspended travel to the Middle East.
Luxury growth engine under threat
Shares in luxury groups LVMH, Hermes, and Cartier-owner Richemont were down 4 percent to 5.7 percent on Monday afternoon as investors digested the knock-on impacts of the conflict.
The Middle East still accounts for a small share of global spending on luxury — between 5 percent and 10 percent, according to RBC analyst Piral Dadhania. But the region was “luxury’s brightest performer” last year, according to consultancy Bain, while sales of expensive handbags have stalled in the rest of the world.
Now, shuttered airports have put an abrupt stop to tourism flows into the region and missile strikes — including one that damaged Dubai’s five-star Fairmont Palm hotel — are likely to dissuade travelers, particularly if the conflict drags on.
“If you assume that it’s a $5 billion to $6 billion (travel retail) market and let’s say it’s going to be shut down for a month, we are talking about hundreds of millions of dollars that are definitely at risk,” said Victor Dijon, senior partner at consultancy Kearney.
If Middle Eastern shoppers cannot travel to Paris or Milan, that could also hurt luxury sales in Europe, he added.
Luxury brands have been investing in lavish new stores and exclusive events across the region. Cartier unveiled a “high-jewelry” exhibition in Dubai’s Keturah Park just days before the conflict started.
Cartier and Richemont did not reply to requests for comment.
Luxury conglomerate LVMH has also bet big on the region. Last month, its flagship brand Louis Vuitton staged an exhibition at the Jumeirah Marsa Al Arab hotel, and beauty retailer Sephora launched its first Saudi beauty brand.
LVMH does not report specific figures for the region, but in January Chief Financial Officer Cecile Cabanis said the Middle East has been “displaying significant growth.” LVMH did not reply to a request for comment on how its business may be impacted by the conflict.
The Middle East has also attracted new investment from mass-market players. Budget fashion retailer Primark said in January that it plans to open three stores in Dubai in March, April and May, followed by stores in Bahrain and Qatar by the end of the year.
“Primark is set to open its first store in Dubai at the end of March but clearly this is a fast-moving situation which we are monitoring closely,” a spokesperson for Primark-owner Associated British Foods said.
Apple stores in Dubai will remain closed until Thursday morning, the company’s website showed, while Swedish fast-fashion retailer H&M said its stores in Bahrain and Israel are closed.
Consumer goods group Reckitt has told all employees in the Middle East to work from home, temporarily closed its Bahrain manufacturing site and suspended all business travel to the region until further notice.
