South Kesteven District Council defends decision to invest in Qatar bank

A council with investments in a Qatar bank, has said financial security is more important than ethical considerations such as human rights.

South Kesteven District Council was among a number of councils criticised by human rights activists after a story in the Guardian revealed it had invested £120 million in Qatar National Bank – a lender in a country with a shocking human rights record.

The council disputes the amount, saying it has invested £13 million in Qatar National Bank.

The Guardian says the council has been investing in the Gulf state since 2017, and puts South Kesteven as the second largest investor in the bank, after the unitary council for Argyll and Bute in Scotland.

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

During the meeting, Coun Ashley Baxter (Alliance SK - Market and West Deeping) 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 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.”

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.