December 1, 2022 6.55 am This story is over 16 months old

Ethics “not paramount” over financial security when investing in Qatar bank, council leaders say

“Key, but not primary, consideration”

A council with investments in a Qatar bank and another UK-based one linked to Qatar, has said financial security is more important than ethical considerations such as human rights.

South Kesteven District Council was among a number of councils heavily criticised by human rights activists after a story in the Guardian revealed they had invested millions in Qatar National Bank (QNB) – a lender in a country with a shocking human rights record.

The newspaper reported the authority had invested £120m in the bank since 2017, however, the council itself disputes this figure saying it only currently had £13 million in there.

A report before councillors on Wednesday showed that as of September this year, the council had £10million invested in QNB and a further £3million invested in Al Rayan Bank, which itself is UK based, but which is also a majority-owned subsidiary of Masraf Al Rayan – one of Qatar’s largest banks.

During the meeting, Councillor Ashley Baxter called the investment “embarrassing” but acknowledged some of it was “to some extent unfairly” due to the “slightly askew” figures published.

However, he added: “We still have money invested in the Qatar bank, and also in Al Rayan… So I think spreading around different banks in Qatar or any other regime of such a type is not particularly going to help.”

He welcomed changes to the council’s treasury strategy, which said investments must consider environmental, social and governance (ESG) factors such as human rights, labour relations and employee wellbeing and balance them against credit rating agency assessments.

Richard Wyles, South Kesteven District Council’s Chief Finance Officer, stressed the council was “investing in a bank, not a country – there is a difference between the two”.

However, he said: “Security has got to be paramount for this council.

“Yes, the ethical element is a key element of decision making, but ultimately the security of the money is the paramount, and my individual responsibility is to make sure that those monies are placed in secure environments.”

He added: “Some of those ethical institutions are not particularly strongly rated, the credit rating scores on some are poor, in which case we would not place monies with them even if they are strong on the ethical side.

“If their rating is substandard, the council will not invest in them.”

SKDC Chief Finance Officer Richard Wyles defended the decision. | Image: SKDC Youtube

Councillors at the meeting also noted that it was sometimes difficult to see where investments in some organisations were going, but that they were confident policies were robust and complied with outside bodies such as the Chartered Institute of Public Finance and Accountancy (CIPFA).

The Guardian report also accused East Lindsey District Council of investing around £50 million over the last five years.

All Lincolnshire councils fly the rainbow flag during LGBT events to show their support, however homosexuality remains a criminal offence in Qatar.

There has also been grave concerns about the deaths of hundreds of migrant workers used to construct stadiums for the World Cup.

Councillors suggested contacting the Guardian to get the figures corrected.

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