Riyadh, Asharq Al-Awsat – Following reports that the United States Department of Justice [DOJ] is investigating alleged “improper payments” made by Barclays bank to win a Saudi banking license, well-informed sources, speaking to Asharq Al-Awsat on the condition of anonymity, stressed that Saudi governmental parties are not implicated in this case.
Britain’s Financial Times newspaper first reported that the DOJ “are probing whether Barclays made any improper payments to win a banking license in Saudi Arabia.” The report added that this investigation is in its early stage and “is looking into whether payments may have contravened the US Foreign Corrupt Practices Act.”
However the Saudi source informed Asharq Al-Awsat that the DOJ investigation does not include any of the bank’s activities in Saudi Arabia. The well-informed source stressed that “the case that is being investigated is regarding improper payments that may have been paid by Barclays bank with the objective of obtaining certain services from a third party.”
The source also asserted that the DOJ has not enacted any formal or informal charges, until now, against any Saudi governmental party, confirming that this case has no connection with the manner in which the bank obtained its license to operate in the country. The source added that this is something that confirms the robustness of the Saudi Capital Markets Authority [CMA] and the Ministry of Trade and Commerce.
For its part, Barclays bank has denied making any “illegal payments” to win a Saudi banking license. The bank issued a statement asserting that “the board of directors of Barclays Saudi Arabia and its executive management takes the issue raised by the media very seriously. Barclays Saudi Arabia confirms that it did not make any illegal payment to the CMA or any of its officials regarding the granting of Saudi license. Barclays Saudi Arabia will continue to conduct business in the kingdom in accordance with the highest professional standards and is fully committed to the development of Saudi Arabia’s financial market.”
Barclays Saudi Arabia also denied that its operations have been affected by the reports of a DOJ investigation. A Barclays Saudi Arabia source, speaking to Asharq Al-Awsat on the condition of anonymity, stressed that “Barclays Saudi Arabia relationship with its clients is based on hard work, clarity and transparency. There is nothing that can disturb this relationship which will continue and develop in a greater manner over the forthcoming period.”
The Barclays Saudi Arabia source also confirmed that the banks current operations in the country are based on a license obtained from the Saudi CMA.
Barclays was licensed to begin operating in Saudi Arabia in August 2009 and grated final approval to begin securities trading in May 2010 after the Saudi CMA said that the bank had met all the relevant requirements.