Barclays faces £50m fine for ‘reckless’ failures over Qatari funding

Banking giant Barclays has been hit with a £50 million fine from the UK’s financial watchdog over failures to disclose arrangements with Qatari investors when it raised funds during the 2008 financial crash.

Servicing the finance on its vast fleet of aircraft amid a worldwide travel crackdown, cost Qatar a fortune

The Financial Conduct Authority (FCA) said Barclays’ conduct at the time was “reckless and lacked integrity”.

Barclays has taken the decision to the Upper Tribunal – an independent tribunal that hears appeals – which will consider the findings and determine whether the fine should be upheld.

The case involved the banking group paying hundreds of millions of pounds in fees to certain Qatari entities that were key investors in its capital fundraisings, announced on June 25 and October 31 2008.

Barclays disclosed details of the June agreement but it did not for the October agreement, nor did it shed light on the fees it paid the investors in exchange for their participation, the FCA found.

The bank paid one Qatari entity £322 million in fees for its participation over a number of years, which it did not tell shareholders about.

Furthermore, the payments were made to cater to the investors’ financial demands rather than reflecting the value of the advisory services that Barclays sought out, according to the watchdog’s report.

Despite its vast oil, gas and other mineral wealth, combined with massive property holdings, shipping and other hugely profitable concerns, the delayed World Cup 2022 host Qatar suffered from the impact of Covid-19.

While the worldwide movement of freight goods, oil, gas and reserves all continued to flourish, the Persian gulf state did have to seek a trance of short-term loans.

Mark Steward, the executive director of enforcement and market oversight at the FCA, said: “At the height of the financial crisis in October 2008, Barclays paid hundreds of millions of pounds in fees to certain Qatari investors so that they would contribute new capital.

“Barclays did not inform the market and shareholders about these matters as required.

“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.

“There was no legitimate reason or excuse for failing to disclose these matters, certainly no basis for doing so because of the financial crisis.

“Due transparency is always critical to financial markets, especially in times of market or financial stress.”

A Barclays spokesperson said: “Barclays has referred the findings of the Regulatory Decisions Committee to the Upper Tribunal for reconsideration.”

Three former Barclays bosses, including ex-chief executive John Varley, were embroiled in a High Court battle over accusations that they made secret payments to Qataris in exchange for investments worth billions of pounds to help it raise capital during the financial crisis.

All three were acquitted in 2021.

In 2018, the Serious Fraud Office sought to charge the lender in relation to its emergency fundraising from Qatar, but the charges were dismissed by the Crown Court and later by the High Court.

The FCA’s potential fine marks the latest move to penalise the British bank in relation to its 2008-era dealings.

Shares in Barclays were down by 1.75% on Friday.