The Financial Conduct Authority (FCA) has issued a £40m fine to Barclays over its handling of a 2008 emergency fundraising deal with Qatari investors.
Originally, the FCA imposed a £50m fine on Barclays for failing to disclose agreements with Qatari entities during its 2008 capital raisings, deeming its conduct in the October deal reckless and lacking integrity.
In an effort to contest the fine, Barclays referred the case to the Upper Tribunal, which was scheduled for today, but later withdrew its challenge.
Acknowledging that the case relates to disclosure decisions made during complex and high-pressure capital raisings over a decade ago, the UK watchdog reduced the penalty to £40m.
Steve Smart, Joint Executive Director of Enforcement and Market Oversight at the FCA, commented: “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.”
Reacting to the fine, Barclays said in a release: “In view of the time elapsed since the events, Barclays wishes to draw a line under the issues referred to in the Decision Notices and has decided not to contest the Decision Notices further.
“Barclays does not accept the findings of the Decision Notices and this has been acknowledged by the FCA. 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.
“A provision in respect of the financial penalty imposed by the FCA was taken in 2022 and there is no material financial impact on Barclays.”
2008 impact still felt today
During the 2008 financial crisis, Barclays sought to strengthen its capital reserves to avoid a government bailout, distinguishing itself from other UK banks that required government assistance.
To achieve this, the bank secured significant investments from Qatari entities, including Qatar Holding and Challenger Universal, through emergency fundraising rounds.
However, these deals later faced intense scrutiny due to undisclosed advisory agreements and substantial payments made to the Qatari investors. Questions about the lack of transparency in these transactions triggered investigations and regulatory action, with allegations suggesting that Barclays had not fully disclosed the terms to the market, undermining investor confidence.
