Barclays fined £40m for ‘reckless’ fundraising in Qatar during financial crisis

Barclays has been fined £40m after raising cash from Qatar.

Regulators said the move was “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 took big bets while bailing out Lloyds and the Royal Bank of Scotland when the industry was on the brink of collapse more than a decade ago.

The Treasury remains a major shareholder in NatWest, as RBS is now called, with a stake of just under 11 per cent.

However, Barclays remained out of taxpayers’ hands as it raised £11.8bn through two share sales to foreign investors in 2008.

As part of the rescue package, Barclays paid £322 million in “advisory fees” to a Qatari state-backed company that helped arrange the deal, reportedly in return for a £4 billion investment. But other shareholders were not told about the fees.

The FCA launched an investigation into the fundraising in 2013 but was halted by an investigation by the Serious Fraud Office.

The FCA fined Barclays £50m in 2022 over the scandal, but the bank appealed.

And her High Court challenge was due to begin yesterday with former boss John Varley appearing as a key witness, but was dropped by the bench at the last minute.

The FCA yesterday reduced the fine to £40m and declared that Barclays’ “conduct in its October 2008 capital raising was reckless and lacked integrity”.

Steve Smart, joint executive director of enforcement and market oversight at the FCA, said: ‘Barclays’ misconduct was serious.

However, the events took place more than 16 years ago and we recognize that Barclays is a very different organization today.”

A Barclays spokesman said it “does not accept” the FCA’s conclusions but wanted to “draw a line under these issues”.

The bank also said it had earmarked funds to cover the financial penalty in 2022, so it will not suffer any material financial impact from the fine.

Barclay’s decision finally closes the book on a legal battle that left the reputations of both the bank and the FCA at stake.

Varley, who ran the bank from 2004 to 2011, became one of the first British bankers to face criminal charges for conduct in the financial crisis era when he and his senior colleagues were taken to court by the SFO in 2019 for his role in fundraising.

But Varley, Roger Jenkins, Thomas Kalaris and Richard Boath were eventually acquitted. Charges against Barclays itself were also dropped before the trial.