The UK’s financial regulator has provisionally fined Banque Havilland £10m and plans to ban its former London-based chief executive and two other former employees for their role in a 2017 plan to devalue the Qatari currency after the Gulf state was embargoed by its neighbors.
The Financial Conduct Authority said Friday that the Luxembourg bank “acted without integrity” by distributing a document with manipulative commercial strategies. These aimed to create a false impression on the Qatari bond market by breaking the riyal’s peg to the US dollar and “thus hurting Qatar’s economy,” according to the FCA.
The FCA found the tactics included trying to weaken Qatar’s financial position in the previous period World Cup 2022that the Gulf State hosted and for which it had committed $200 billion in infrastructure spending.
Banque Havilland intended to present the document to representatives of countries seeking to put economic pressure on Qatar, including the UAE, to market its services, according to regulatory findings. A copy of the bank’s document was provided to a representative of an Abu Dhabi sovereign wealth fund, the FCA added.
Along with the bans on financial services, the FCA plans to fine Edmund Rowland, the former chief executive of the London branch, £352,000; David Weller, a former senior manager, £54,000; and Vladimir Bolelyy, a former employee, £14,200.
Decisions are provisional; the bank, Rowland and Bolelyy are appealing the rulings in court. While Weller isn’t contesting the FCA’s findings, the watchdog’s decision in his case has also been referred to the court by another individual, David Rowland, who argues the FCA’s decision unfairly prejudices him.
The FCA declined to provide contact information for the people’s defense attorneys at their request.
“Banque Havilland’s conduct actively encouraged the commission of financial crimes by supplying ideas for manipulative trading to someone it believed to have the political motivation to potentially be interested in such ideas,” said Therese Chambers, executive director of enforcement and market supervision of the FCA. “It hardly needs to be said, but such conduct is completely unacceptable.”
The FCA did not believe the strategy in the document had been implemented, but such “manipulative trading” could have been a criminal offense had it taken place in the UK, the watchdog said.
In a statement Banque Havilland confirmed that it had referred FCA’s decision to the Upper Tribunal. The bank said it was “disappointed by the decision reached by the FCA and does not accept being directly responsible for the actions of the people involved in the criticized activity, who have long since left the bank”.
In 2017, Qatar was subjected to a damaging trade and travel boycott by its bigger neighbors, led by Saudi Arabia and the United Arab Emirates. They cut off travel and trade links with gas-rich Qatar, accusing it of favoring Islamist extremism, an accusation denied by Doha.
In the aftermath of the shock embargo, pressure on Qatar’s economy mounted, which it had to repatriate about 20 billion dollars in business overseas to support its financial system.
Qatar has also had to open up new air and sea routes and rely on military support from its ally Turkey to protect the state.
Both sides accused the other of engaging in dirty tactics, hacking and disclosure of sensitive information to inflict reputational damage.
In an internal meeting, Rowland said Saudi Arabia, Abu Dhabi and Egypt are ready to use a total of $23 billion in Qatari assets to put pressure on the riyal, according to the FCA decision notice.
A preparatory document, titled “Setting fire to the bottom of the neighbor’s house”, outlined the details of the strategy to attack the riyal by building up and then selling positions in Qatari debt instruments and launching a public relations campaign to urge a sell-off of the riyal and bonds.
The notice said the final presentation also mentioned a “Fifa option,” saying that if Qatar were to spend its reserves to secure the riyal, there would be less “dry powder” for Qatar to meet its $200 pledge. billion in infrastructure spending for the 2022 World Cup.
In 2021, Saudi Arabia called a meeting to end the dispute between Qatar and its neighbors, calling for unity in the face of Iranian threats.
Since then the relationship has warmed up, including high-profile visits by Saudi and Emirati leaders at last year’s soccer tournament.
Additional reporting by Kate Beioley in London
—————————————————-
Source link