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Barclays faces investors’ ire over Eros bonds issue

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Barclays is facing investors’ anger for mishandling the bond issue of India-based Bollywood film group Eros, This is Money reports.

The investors have approached the Financial Conduct Authority and the Financial Ombudsman claiming they incurred losses due to Barclays’ tardiness in dealing with the Eros flip-flop over its bond buyback plan.

The Bollywood entertainer had come out with a £50million bond issue, but last March it told investors that it would buy back up to half of its bonds at 60 pence each.

However, in a few weeks Eros changed its mind and told bondholders they could have their bonds back.

While other platforms such as Hargreaves Lansdown and AJ Bell returned bonds to investors within days, for Barclays it took nearly nine months.

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Customers on Barclays’ Smart Investor platform are still unable to trade them.

During this period Eros bonds slumped to 12p from 32p, thereby putting Barclays customers at a huge disadvantage.

The bank also delayed paying interest on the bonds.

Barclays said it went by the rules, and blamed American lender Citi for the delay, as it acts as the custodian for Eros bonds owned by Barclays customers.

It claims that Citi informed them that funds were not immediately available. Citi has refused to comment.

Barclays also sent out erroneous information to customers and miscalculated the value of bondholders’ investments.

Last week, Eros again reneged on a proposal to buy back some of its bonds.

The company had offered to buy £2 million of bonds by March 31 but admitted its inability to do so hours before the market closure on Thursday.

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