Barclays has been fined £40 million for ‘reckless’ fundraising in Qatar during the financial crisis
Barclays has been fined £40 million after raising money from Qatar.
Supervisors called the measure ‘reckless and lacking integrity’.
The Financial Conduct Authority (FCA) told the banking giant 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 has taken a major stake in rescuing Lloyds and Royal Bank of Scotland as the sector teetered on the brink of collapse more than a decade ago.
The Treasury is still a major shareholder in NatWest, as RBS is now known, with a stake of just under 11 percent.
However, Barclays remained out of the hands of the taxpayer as it raised £11.8 billion through two share sales to foreign investors in 2008.
Regulators say Barclays should have provided more details about the £40 million it raised from Qatar that helped avoid a taxpayer bailout during the 2008 financial crisis.
As part of the rescue package, Barclays paid £322 million in ‘consultancy fees’ to a Qatari state-backed firm that helped organize the deal, reportedly in return for a £4 billion investment. But other shareholders were not informed about the compensation.
The FCA launched an investigation into the fundraising in 2013, but this was held up by a Serious Fraud Office investigation.
The FCA fined Barclays £50 million in 2022 over the scandal, but the bank appealed.
And the challenge at the Upper Tribunal was due to begin yesterday with former boss John Varley as a key witness – but the bank dropped the case at the last minute.
The FCA yesterday reduced the fine to £40m, saying Barclays’ conduct in its October 2008 capital increase was reckless and lacked integrity.
Steve Smart, the FCA’s joint executive director of enforcement and market supervision, said: ‘Barclays’ misconduct was serious.
However, the events occurred over sixteen years ago and we recognize that Barclays is a very different organization today.”
A spokesperson for Barclays said it ‘does not accept’ the FCA’s findings but wanted to ‘draw a line between the issues’.
The bank also said it had set aside funds to cover the financial penalty in 2022 so that it will not suffer any material financial impact from the fine.
Barclay’s decision finally closes the book on a legal battle with the reputations of both the bank and the FCA at stake.
Varley, who led the bank from 2004 to 2011, became one of the first British bankers to be criminally prosecuted for conduct during the financial crisis 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. The charges against Barclays itself were also dropped before the trial.
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