Barclays fined £40m over ‘reckless’ Qatar fundraising during the financial crisis
Barclays has been fined £40million after raising cash from Qatar.
Regulators said the move was ‘reckless and lacked integrity’.
The Financial Conduct Authority (FCA) told the banking giant that it should have provided more details about an emergency cash injection that helped it avoid a taxpayer bailout during the 2008 financial crisis.
The Government took large stakes while bailing out Lloyds and Royal Bank of Scotland as the industry teetered on the brink of collapse more than a decade ago.
The Treasury is still a major shareholder in NatWest, as RBS is now called, with a stake of just under 11 per cent.
Barclays stayed out of taxpayer hands, however, as it raised £11.8billion through two share sales to foreign investors in 2008.
Regulators said Barclays should have provided more details about the £40m cash it raised from Qatar that helped it avoid a taxpayer bailout during the 2008 financial crisis
As part of the rescue package, Barclays paid £322million worth of ‘advisory fees’ to a Qatari state-backed firm that helped organise the deal, allegedly in return for a £4billion investment. But other shareholders were not told about the fees.
The FCA launched an investigation into the fundraising in 2013 but it was held up by a probe by the Serious Fraud Office.
The FCA fined Barclays £50million in 2022 over the scandal but the bank appealed.
And its challenge at the Upper Tribunal was due to begin yesterday with former boss John Varley appearing as a key witness – but it was dropped by the bank at the last minute.
The FCA yesterday reduced the fine to £40million while declaring that Barclays’s ‘conduct in its October 2008 capital raising was reckless and lacked integrity’.
Steve Smart, the FCA’s joint executive director of enforcement and market oversight, said: ‘Barclays’ misconduct was serious.
However, the events took place over 16 years ago and we recognise that Barclays is a very different organisation today.’
A Barclays spokesman said it ‘does not accept’ the FCA’s findings but wished to ‘draw a line under the issues’.
The bank also said it had earmarked funds to cover the financial penalty in 2022, so it will suffer no material financial impact from the fine.
Barclay’s decision finally closes the book on a legal battle which left the reputations of both the bank and the FCA hanging in the balance.
Varley, who ran the bank from 2004 to 2011, became one of the first British bankers to face criminal charges over financial crisis-era conduct when he and senior colleagues were taken to court by the SFO in 2019 over their role in the fundraising.
But Varley, Roger Jenkins, Thomas Kalaris and Richard Boath were ultimately acquitted. Charges against Barclays itself were also dropped before the trial.
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