Barclays caught up in UniCredit tax prosecution

ITALY is to prosecute several Barclays bankers alongside former UniCredit chief executive Alessandro Profumo, who is now chairman of one of the world’s oldest banks, Banca Monte dei Paschi di Siena.

Profumo, who is being prosecuted alongside 19 others including a handful of Barclays bankers, is being targeted for allegedly authorising a scheme that allowed UniCredit to duck a large tax bill.

The prosecution claims that the bank devised a scheme called Project Brontos in 2007-2008 using financial products put together by investment bankers at Barclays, allowing it to avoid tax.

Project Brontos is alleged to have allowed UniCredit to incorrectly classify some of earnings as dividends, on which it would be liable for less tax.

Both Barclays and UniCredit insist that neither of them broke any laws. Barclays said it “takes its responsibilities as a corporate citizen very seriously”. The bank added that it does not think anyone involved broke the law: “We continue to support fully the individuals named in this matter,” it said.

UniCredit said it “always acted with transparency and good faith and in compliance with applicable laws”.

The case comes at a bad time for Barclays, which complained to the British government last week over its decision to “single out” the bank and retrospectively punish it for tax avoidance.