Barclays labels $1.0
billion lawsuit over 2008 fundraising 'misconceived'
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[June 17, 2016]
By Kirstin Ridley
LONDON (Reuters) - Barclays has
described as "fundamentally misconceived" a $1.0 billion-plus
lawsuit brought by British financier Amanda Staveley over the bank's
emergency fundraising from Gulf investors at the height of the
credit crisis in 2008.
Staveley's private equity group PCP Capital Partners is claiming
damages for alleged fraudulent misrepresentation in a civil case
lodged at London's High Court in January that sheds light on how Abu
Dhabi and Qatari sheikhs helped bail Barclays out nearly eight years
The case hinges on the terms Qatari and Abu Dhabi investors received
for participating in a cash call to help Barclays raise around 7.0
billion pounds ($10 billion) and avoid state aid.
Laying out a 44-page defense in a court document seen by Reuters on
Thursday, Barclays denied dishonesty and recklessness and called
PCP's assertion it had been a potential investor in the Abu Dhabi
syndicate at the time "utterly speculative and flawed".
The case is unfolding months before the Serious Fraud Office (SFO)
is due to decide whether to charge Barclays and former executives in
a separate criminal inquiry into financial arrangements with Qatar
that included a loan to the Gulf state, as the bank battled to raise
cash during the financial crisis.
Barclays, which has not commented on the criminal investigation,
made a High Court application in an attempt to delay filing a
defense against the civil lawsuit until the SFO concludes its near
four-year inquiry this year.
But during a London High Court hearing on May 19, the bank agreed to
lay out its response by June 16.
PCP, which put together a syndicate of Abu Dhabi investors for
Barclays in October 2008, alleges in the lawsuit that it received an
"express and implied agreement", made orally and in writing by
Barclays staff, that it would get the same terms as Qatari
The lawsuit alleges Qatari investors received extra fees of 346
million pounds ($490 million), which includes an alleged 280 million
pound "sham advisory services agreement" with Qatar.
Had PCP received the same deal terms as Qatar, it would not have had
to give up a 10 percent interest in the funding deal to keep Abu
Dhabi investors on board when Barclays shares fell in November 2008,
the lawsuit alleged.
[to top of second column]
Dubai International Capital's chief negotiator Amanda Staveley
smiles before the Champions League semi-final first leg soccer match
between Liverpool and Chelsea at Anfield in Liverpool, northern
England, April 22, 2008. REUTERS/Phil Noble/File Photo
Barclays denied that PCP had been told it would get the same deal as Qatari
investors and alleged the 280 million pound fee paid to Qatar was for "separate
services which required separate payment".
Another 66 million pound fee paid by Barclays to Qatari investors at the time
was for its role in arranging that Abu Dhabi's Sheikh Mansour bin Zayed al-Nahyan
would invest in Barclays, it alleged.
Reuters was not able to reach Sheikh Mansour for comment.
"Barclays intended and expected that in return for the ASA (advisory services
agreement) fee it would receive valuable services," it stated in the court
"In so far as Barclays made any representations, Barclays denies that it made
those representations dishonestly or recklessly."
Qatar's sovereign wealth fund, the Qatar Investment Authority, has declined to
comment on the case.
Staveley's PCP, which has four weeks to file a rebuttal, declined to comment.
(Reporting by Kirstin Ridley; Additional reporting by Tom Finn; Editing by
Rachel Armstrong, Toni Reinhold)
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