Barclays accepts £40m FCA fine in Qatar case

A court battle between Barclays and the City regulator over controversial deals the bank struck to avoid a government bailout during the 2008 crisis has been called off, after the lender agreed to pay a £40 million fine.
The FTSE 100 bank had been set to fight a penalty from the Financial Conduct Authority in a three-week court case due to start today, but said just hours before the hearing was due to begin that it had withdrawn its challenge.
Barclays said that although it did not accept the regulator’s findings, it nevertheless wanted to “draw a line” under the matter “in view of the time elapsed since the events”.
The case would have thrust the 16-year-old controversy, which has already been the subject of separate criminal and civil proceedings, back into the spotlight.
The scandal is linked to two emergency cash calls that Barclays undertook in June 2008 and October of that year, when the global banking system plunged into turmoil.
These transactions, with investors including Qatar, raised £11.8 billion for Barclays and helped it to escape the fate that befell Royal Bank of Scotland — now called NatWest — and Lloyds Banking Group, which were both partially nationalised in state bailouts to avert their collapse.
At issue are side deals that involved Barclays making secret payments of £322 million to the Qataris to secure their participation in the fundraisings.
The FCA said in October 2022 that it planned to fine Barclays over these arrangements for conduct that was “reckless and lacked integrity”. Transparency about these concealed fees “would have had a material impact on the terms of the capital raisings as disclosed”, the watchdog said.
“This would have been highly relevant information to shareholders, investors and the wider market, especially in October 2008 when Barclays’ capital raising required approval by shareholders, the disclosed costs were already perceived to be very expensive and there was financing available from the UK government,” the FCA added.
However, Barclays disputed the watchdog’s findings and had referred the matter to the Upper Tribunal, a court that deals with appeals against regulatory decisions.
Barclays said on Monday morning: “Notwithstanding the difference of view, Barclays has concluded that the interests of the bank, its shareholders and other stakeholders are best served by withdrawing the references.”
The final fine is lower than the £50 million the regulator had originally proposed two years ago.
Steve Smart, the FCA’s joint executive director of enforcement and market oversight, said: “Barclays’ misconduct was serious and meant investors did not have all the information they should have had.
“However, the events took place over 16 years ago and we recognise that Barclays is a very different organisation today, having implemented change across the business. It is important that listed firms provide investors with the information they need.”
The Serious Fraud Office conducted a criminal investigation into the Qatari payments and attempted to prosecute Barclays and four former executives, including John Varley, the former boss of the bank. However, the charges against the bank were dismissed in 2018 and the four individuals were acquitted in 2019 and 2020.
Varley had been set to appear as a witness for Barclays at the Upper Tribunal.
The secret fees were also the focus of a civil case against Barclays in the High Court brought by Amanda Staveley, a financier who had played a role in the October 2008 cash call. A judge ruled against her claim in February 2021 but said in his judgment that Barclays was “guilty of serious deceit”.