C.S. Venkatakrishnan's mailbox is rather full these days. In a letter, more than 40 nonprofit organizations sent an ultimatum to the CEO of Barclays demanding the retraction of a recently published analyst report on the French energy company Total Energies.

Campaigners for environmental and social justice complained the paper was highly unprofessional and damaging to the reputation of the bank.

A Mouthpiece for Total?

As «Bloomberg» (behind paywall) reports, a team of Barclays analysts published a report in March on the planned East Africa Crude Oil Pipeline (EACOP) carrying oil produced in Uganda 900 kilometers to the coast of Tanzania. Environmental activists oppose the $5 billion project fearing damage to nature, the local population, and the climate.

Apparently, on their initiative, the analysts made a trip to Tanzania to gauge the situation, meeting various stakeholders, including NGOs and local representatives of Total Energies. By concluding many of the concerns expressed exaggerate the potential impact, take too little account of the mediation measures initiated, or are based on false or inaccurate information, infuriated the project's opponents.

They simply denied the analysts' competence to assess the impacts and accused them of being mouthpieces for the energy giant. The report «is neither an independent nor a serious investigation of the facts,» the nonprofits wrote in their letter.

Plausible Distancing?

A spokeswoman for Barclays told Bloomberg that «the views expressed in any Barclays Research publication are solely and exclusively those of the authoring analysts and don’t reflect the view of the Barclays Group,» and declined to comment on whether the report would be retracted. 

This smacks of implausibility, since it is likely to have been a sell-side analysis, for which customers must have to pay in accordance with MiFID regulations, making the paper a product of the bank, for which it is liable. Barclays is leaving its employees out in the cold by distancing itself.

Chinese Pig

A similar thing has happened to financial professionals at Swiss banks. In 2019, UBS Chief Economist Paul Donovan wanted to discuss the impact of consumer prices in China in one of his commentaries. He referred to pork, which has become more expensive in the People's Republic due to animal diseases. Donovan joked, «Does it matter? If you're a Chinese pig, it does - it matters if you eat pork in China.»

That ignited a storm of outrage in China and calls for a boycott of UBS. The public thought «Chinese pig» referred to them. UBS, which invests millions in developing the Chinese market, took cover and suspended Donovan until the fervor over «Swinegate» died down. By the fall of the same year, he was back in his post.

Swissair Loss Underestimated

Christopher Chandiramani, a former Credit Suisse analyst, was less fortunate. In the summer of 2000, he had warned in a report that Swissair would have to reckon with a loss of at least 500 million francs, resulting in the Swiss airline's share price plummeting. He was subsequently pressured to resign on the grounds of violating internal rules on several occasions. Chandiramani later defended himself in court, claiming that he had been used as a pawn after Swissair CEO Philippe Bruggisser complained to Credut Suisse CEO and Swissair board member Lukas Muehlemann about the plummeting share price.

It later turned out that the ex-analyst had underestimated the losses. In 2001, Swissair went bankrupt after a loss of three billion francs, costing around 5,000 jobs.

Chandiramani, who was fired, was accused of having behaved unprofessionally, an accusation being trotted out against Barclays analysts. Colleagues at other financial institutions should take note. 

Sitting behind a desk at a bank and updating Excel sheets is potentially more dangerous than one might think.