Barclays hit by claims it misled shareholders over Abu Dhabi government investment

Barclays came under fire again Monday for reportedly misleading shareholders over a three billion-dollar investment by the owner of Manchester City F.C.

Barclays came under fire again Monday for reportedly misleading shareholders over a three billion-dollar investment by the owner of Manchester City F.C.

The news comes in the wake of the bank's £290m fine to UK and US regulators over LIBOR rigging and mis-selling of payment protection insurance.

The bank announced in 2008 that Manchester City owner Sheikh Mansour had agreed to invest funds to help avoid a government bailout - but the money actually came from Abu Dhabi's government, according to a BBC Panorama investigation.

Barclays was rescued in 2008 by £7.0bn worth of new investment, most of which came from Qatar and Abu Dhabi.

Half of the amount was supposed to have come from Mansour but Barclays has confessed it was told the investor might change shortly before shareholders backed the deal.

The bank allegedly kept quiet until the change was confirmed a few hours later.

It claimed to have later provided "appropriate disclosure" in three prospectuses that were issued the following day.

However, the disclosure was apparently hidden in the fine print which said that Mansour had arranged for his investment to be funded by an Abu Dhabi government vehicle which would become the indirect shareholder.

The bank continued to identify Mansour as the investor in its annual reports of 2008 and 2009.

Barclays said the mistake in its accounts was "a drafting error" and the information in the prospectuses was "entirely appropriate in all the circumstances".

"The shareholders meeting had already taken place and there was therefore no need to issue press releases or additional formal communications to shareholders/other market participants," the bank added.

The revelations are the latest in a string of scandals including the bank's rate fixing and reports it would be slashing about 3,500 jobs from its 23,300-strong workforce.

The bank will reveal its full-year 2012 results Tuesday when new Chief Executive Officer Antony Jenkins unveils his so-called 'Project Transform' business strategy.

Shares rose 0.40% to 299.95p at 15:27 Monday.

RD

Recommended

Share tips of the week – 21 January
Share tips

Share tips of the week – 21 January

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
21 Jan 2022
Seven cheap defence stocks to buy now
Share tips

Seven cheap defence stocks to buy now

We’ve got used to a world without war between major powers, but that era is coming to an end as Russia threatens Ukraine and China eyes Taiwan. Buy de…
21 Jan 2022
Invest in VCTs: tax-free investments set to break records
Investment strategy

Invest in VCTs: tax-free investments set to break records

Generous tax breaks make VCTs – venture capital funds – an attractive supplement to pensions.
21 Jan 2022
HubSpot: a tech stock set to tumble
Trading

HubSpot: a tech stock set to tumble

US tech stocks have had a fantastic couple of years. But this year is unlikely to be so bullish for high-fliers that can’t turn big profits.
18 Jan 2022

Most Popular

Ask for a pay rise – everyone else is
Inflation

Ask for a pay rise – everyone else is

As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why yo…
17 Jan 2022
Temple Bar’s Ian Lance and Nick Purves: the essence of value investing
Investment strategy

Temple Bar’s Ian Lance and Nick Purves: the essence of value investing

Ian Lance and Nick Purves of the Temple Bar investment trust explain the essence of “value investing” – buying something for less than its intrinsic v…
14 Jan 2022
US inflation is at its highest since 1982. Why aren’t markets panicking?
Inflation

US inflation is at its highest since 1982. Why aren’t markets panicking?

US inflation is at 7% – the last time it was this high interest rates were at 14%. But instead of panicking, markets just shrugged. John Stepek explai…
13 Jan 2022