FTSE 100 companies pay billions in dividends to Qatari investors | FTSE
Some of the UK’s largest listed companies, including water and energy giants, have handed over nearly £500m to Qatari public investors this year, raising concerns that company profits Blue chip companies are backing the controversial World Cup host.
The dividend payouts are the result of the Gulf nation’s investments in a series of FTSE 100 companies, including Barclays, Shell and a utility company Thirty Severnwhich posted strong profits amid a cost of living crisis and the UK’s worst drought in centuries.
The figures, compiled by the Guardian, cover funds distributed to Qatari state shareholders in the 10 months leading up to November’s controversial tournament.
However, the Qatari state’s revenue from UK-listed companies has likely amounted to billions of pounds since it won the right to host the FIFA World Cup in 2010.
The figures will raise concerns about how daily spending by British consumers, through banking, groceries and air travel, could inadvertently support the Qatari host, who has criminalized homosexuality and has been accused of exploit migrant workers to build World Cup infrastructure.
Although the holdings of listed companies are publicly available, little is known about the types of investors who hold shares in UK companies.
Amnesty International UK’s director of economic affairs, Peter Frankental, said UK companies needed to be more upfront about where dividend payments go.
“Qatar’s considerable wealth and vast portfolio of overseas investments have been accompanied by the systematic exploitation of its vast migrant workforce, many of whom have worked for years for abusive employers with the connivance of the Qatari authorities,” Frankental said.
“UK companies must be transparent about any human rights abuses that may have taken place across their chain of investors, including those stemming from Qatar’s notorious construction sites.”
Qatar’s $450bn (£389bn) sovereign wealth fund, the Qatar Investment Authority (QIA), has taken a huge interest in UK-listed investments over the past few decades, spending billions to acquire stakes in a series of blue-chip UK companies such as the London Stock Exchange Group and Royal Dutch Shell.
UK stocks make up almost a fifth of the QIA’s equity portfolio at 17% and are worth a total of $8.8 billion. This makes the UK the authority’s third largest equity investment destination, behind Germany which accounts for 29% of the portfolio worth $15 billion, and Qatar where equities account for nearly 19% of the portfolio. at $9.6 billion.
These British stakes meant that the investment authority – and therefore the Qatari state – benefited from the profits of British companies, which were then returned to shareholders through buyouts and dividends.
Guardian analysis of publicly available data shows Qatari vehicles, including QIA, have pocketed around £475million in dividends since January alone, helping to prop up Qatari finances at a time when the The state has spent around $200 billion preparing to host the World Cup.
Including Shellwhich paid nearly $17 million in dividends to Qatar in a year it posted record profits thanks to soaring energy prices linked to war-induced shortages in Ukraine.
Meanwhile, the QIA has gained £13m from its 4.6% stake in Coventry-based water company Severn Trent, which has come under fire for one-off payments to executives – including £3.9m for his boss Liv Garfield – even though the country has suffered the worst drought conditions in centuries.
The QIA also earned £11m from the London Stock Exchange Group, in which QIA still has a 7% stake, and a further £33m of its stake in supermarket chain Sainsbury’s.
This is on top of £64million from a 6.3% stake in banking giant Barclays. His stake in the UK bank is a remnant of his controversial involvement in the bank’s emergency fundraising at the height of the 2008 financial crisis. The funding arrangement helped Barclays avoid a public bailout that reportedly placed it under government control, but then led the Serious Fraud Office to accuse three former Barclays bankers of funneling secret charges to Qatar in exchange for the emergency funding. A jury found these executives not guilty in early 2020. The bank itself is now appealing against a regulatory fine for the deal.
One of the biggest sources of UK dividend income comes from the UK-listed mining giant glencore, which has paid Qatar Holding – a subsidiary of the QIA – a total of $387m (£347m) since January. Dividends are the result of an 8% stake in the company.
Although Glencore is headquartered in Switzerland rather than the UK, most UK pension schemes will have a stake in the FTSE Company listed on the 100, which trades in metals used in key technologies such as electric batteries. Glencore has become one of the world’s biggest commodities companies thanks to a £50bn merger with mining firm Xstrata, sealed in late-night talks involving Tony Blair and billionaire Qatari politician Hamad bin Jassim Al Thani .
Other dividend payouts came from stakes in disinfectant Dettol and maker of Nurofen Reckitt Benckiserwhich paid £382,000 to QIA, and private equity group Melrose Industries, which owns GKN, £14,000.
State-owned Qatar Airways also has a 25.23% stake in British Airways owner IAG, although the group – which is still recovering from the Covid pandemic – has yet to pay a dividend this year. .
The QIA, Glencore, Barclays, Severn Trent and the London Stock Exchange declined to comment. Melrose Industries did not respond to requests for comment.
Sainsbury’s said in a statement it did not choose its shareholders and the majority were UK pension funds and private investors, including Sainsbury’s staff.
Reckitt Benckiser said the company had recently strengthened its policies to prevent modern slavery and had a zero-tolerance policy on human rights abuses. “We are used to working throughout our supply chain to strengthen human rights and labor standards, excluding suppliers where our standards are not met, and working with suppliers, peers and civil society to enable large-scale change.”
Shell did not directly comment on the dividend payouts, but did share a statement regarding its approach to separate investments in Qatar. “A commitment to worker welfare and respect for people is fundamental to the way Shell Group companies operate globally, including in Qatar.”
These dividends from listed companies come on top of valuable stakes in UK private companies such as Harrods, Heathrow, The Shard and Starling Bank.
In December, engine manufacturer Rolls-Royce announced that the QIA was spending £85 million to take a 10% stake in a UK government-backed project to develop small nuclear power plants, known as the Rolls-Royce SMR.
QInvest, another Qatari royal family investment vehicle, also maintains a 43% of the stockbroker’s capital and the investment bank Panmure Gordon, which published its first profit in three years in 2021.
Meanwhile, Farnborough-based arms company BAE Systems announced in March that it had signed an agreement to develop naval vessel support for the naval force of the Emir of Qatar. And amid the UK energy crisis, Qatar’s participation in the South Hook LNG terminal has become a priority. State-owned Qatar Energy has a 67.5% stake in the Pembrokeshire-based terminal.
Qatar is one of the UK’s biggest sources of liquefied natural gas (LNG), a role that led Boris Johnson to discuss increasing supply from the Gulf state in late 2021, as world gas prices were skyrocketing.