Barclays Admits Mistake in Reporting of Ownership

Barclays Canary Wharf

Trouble-hit Barclays has admitted making an embarrassing gaffe over the reporting of a lifeline investment in the bank that saved it from seeking a government bailout during the financial crisis of 2008.

Sheikh Mansour bin Zayed Al Nahyan, the owner of Manchester City, was named at a vote of shareholders on 24 November as the investor who had pumped in £3bn to the then cash-strapped bank.

But the following day, only the small print of regulatory disclosures by the bank showed that he had passed the stake on to the International Petroleum Investment Company, owned by the state of Abu Dhabi, of which he is chairman.

The Barclays annual report of 2008, issued much later, still refers to Mansour as being the owner of the stake, something that Barclays now calls a "drafting error".

The mistake came to light in during an investigation by the BBC's Panorama programme to be aired on Monday night . The programme questions whether shareholders were properly kept informed.

Professor Alistair Milne, an expert on City regulation, tells Panorama that banks are expected to release accurate information about major deals. "Any discrepancy of that kind is serious because it raises questions in the minds of investors," he says. "Every bank is well aware the annual report is a critical document and a huge amount of time and attention is put in to trying to get all the details correct."

The mistake comes at an awkward time for the bank which is in the middle of an investigation into disclosures it made when it raised funds from Qatar at the same time. It also comes just ahead of a key "strategy day" briefing by Barclays chief executive, Antony Jenkins, when he will try to outline a new way forward for a business hit by Libor and others scandals.

The bank said on Sunday night it was satisfied that it had kept shareholders closely informed of all changes in ownerships of stakes as soon as they were confirmed. "Immediately following receipt and verification of that information [on 24 November 24] we made overnight amendments to the relevant disclosures relating to the investors in the prospectus documents. The change in ownership of the investing companies had no bearing on the transaction or required approvals."

Panaroma also investigates the structured capital markets (SCM) division which Jenkins will announce on Tuesday is to be shut down. The programme said SCM employed just 100 people and yet made up to £1bn a year in profit for Barclays.

Jenkins took the helm in September following the sudden departure of Bob Diamond in July over the Libor rigging scandal. Jenkins's strategy day will coincide with full-year results which will be hit by the £290m Libor fine and charges for mis-selling payment protection insurance and interest rate swaps to small businesses.

He has promised to clean up the culture of the bank, telling staff to leave if they do not want to abide by new rules of ethical behaviour. Some 2,000 jobs are expected to go but Jenkins has made clear the bank will not be broken up along its investment banking and retail banking lines.

Powered by Guardian.co.ukThis article was written by Jill Treanor and Terry Macalister, for The Guardian on Monday 11th February 2013 00.02 Europe/London

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