Barclays is challenging a £50mn fine from UK regulators over the bank’s allegedly “reckless” failure “to disclose certain arrangements” about controversial Qatari fundraising 14 years ago, during the height of the financial crisis.
Mark Steward, head of enforcement at the Financial Conduct Authority, said on Friday Barclays had failed to make appropriate disclosures about paying “hundreds of millions of pounds in fees to certain Qatari investors so that they would contribute new capital”.
“Barclays’ failure to disclose these matters was reckless and lacked integrity and followed an earlier failure to disclose fees paid to Qatari investors in June 2008,” Steward added. “There was no legitimate reason or excuse for failing to disclose these matters.”
Barclays, which has faced several legal cases over the Qatar fundraisings, is contesting the FCA’s decision to the regulator’s upper tribunal. The bank has challenged every sanction over the fundraising.
The bank said: “Barclays has referred the findings of the regulatory decisions committee to the upper tribunal for reconsideration.”
The FCA first issued a warning notice about the deal in 2013, but paused its action pending the outcome of cases brought by the Serious Fraud Office, which concluded in 2019.
The latest decision is another setback for Barclays, which has spent millions of pounds on legal fees for court battles and fines relating to its fundraising.
Barclays raised more than £11bn in emergency cash from investors during the 2008 financial crisis, helping the bank avoid a government bailout. Other highs street lenders, including Royal Bank of Scotland and Lloyds Banking Group, were rescued with taxpayers’ money.
But Barclays’ arrangements with one of the investors, the Qatari Sovereign Wealth fund, included a controversial “advisory agreement” with fees.
At the heart of the issue was whether Barclays received services for the £322mn in fees it paid Qatar, or if it was an extra payment related to the share transactions that was hidden from the market and other investors.
A $3bn loan from Barclays to the state of Qatar in November 2008 also came into question, over whether it was an inducement to the Qataris to invest.
The Serious Fraud Office in 2017 accused Barclays and four former senior executives of conspiracy to defraud and false representation, in what became the first criminal charges in the UK filed against a bank and its former bosses.
However, charges against the bank were dismissed by the court in 2018.
In 2020, former bankers Roger Jenkins, Thomas Kalaris, and Richard Boath were acquitted of criminal charges five months into the trial. Former Barclays chief executive John Varley was previously acquitted as a result of insufficient evidence.
That year, financier Amanda Staveley also launched a court battle against Barclays for £1.6bn. She claimed she lost out on fees because Barclays gave side payments to Qatar in the cash call.
Staveley invested £3.5bn in Barclays on behalf of Sheikh Mansour bin Zayed Al Nahyan, a member of Abu Dhabi’s royal family, through her PCP Capital Partners, for a £30mn fee.
She claims Barclays told her repeatedly that she would be given the same terms as the Qatar sovereign wealth fund. However, Staveley alleged Barclays paid them millions in secret fees for a $3bn loan. She lost her case last year, although the High Court found that Barclays had made false misrepresentations to Staveley’s PCP and had been “guilty of serious deceit”.
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