By Max Colchester 

Barclays PLC said Monday that a British court dismissed charges brought against the bank over its emergency fundraising from Middle Eastern investors during the financial crisis.

The decision is a major setback for the U.K.'s Serious Fraud Office which had spent five years probing how Barclays wooed Qatari investors to prop up the bank during the 2008 financial market meltdown. The SFO last summer charged the bank on several counts, accusing it of lending $3 billion to the State of Qatar to effectively fund its own bailout. The SFO also probed hundreds of millions of dollars worth of "advisory services" that was paid by Barclays to Qatari investors. The payment wasn't initially disclosed after the capital was raised.

Barclays said the U.K. court rejected charges brought by the SFO, including that it conspired with former executives to commit fraud and provided "unlawful financial assistance." The SFO said it would try to reinstate the charges by applying to a U.K. high-court judge.

Shares in the bank rose following the news.

The decision doesn't affect the case brought by the SFO against a cadre of former top Barclays executives involved in the deal. The SFO has also charged Barclays former chief executive John Varley, former senior investment-bank executive Roger Jenkins and two other former executives with conspiracy to commit fraud.

Ten years on from the Qatari bailout Barclays is facing other legal problems linked to the capital raisings, which saw the bank raise $15 billion from investors in two cash calls. In a separate probe, the U.K.'s Financial Conduct Authority imposed a GBP50 million ($67.3 million) fine over the disclosure failures. The authority said earlier this year it was reviewing the case after being handed new evidence. Barclays is contesting the fine. The U.S. Department of Justice and the Securities and Exchange Commission have also been conducting investigations relating to payments made to officials around the cash injection.

Separately, PCP Capital Partners, a private-equity group, is suing Barclays for $1 billion alleging the bank made "sham payments" to the Qataris and disadvantaged PCP's client, the Abu Dhabi sovereign-wealth fund, which also participated in the 2008 fundraising. Barclays is defending itself against the claim, according to a filing.

Write to Max Colchester at max.colchester@wsj.com

 

(END) Dow Jones Newswires

May 21, 2018 08:43 ET (12:43 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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