The case goes back to the 2008 financial crash when the UK lender sought funds in Qatar to bolster its capital, avoiding the fate of other banks that were bailed out by the taxpayer. After a court trial ended in 2019, the FCA resumed its probe of Barclays.

The Financial Conduct Authority intends to fine Barclays £50 million ($56 million) over the UK bank's failure to disclose its agreement with Qatar for raising capital during the 2008 financial crash.

The bank’s use of Qatari funds – £322 million in total – saved it from a UK taxpayer-funded bailout, while rivals such as Lloyds Banking Group and Royal Bank of Scotland had to be rescued. 

In a statement last Friday, the FCA said Barclays has referred decision notices to the Upper Tribunal. As a result, the FCA said that any findings in notices will be “provisional.”

“Barclays’ conduct in the October capital raising was reckless and lacked integrity,” the FCA said. 

The FCA said that certain Qatari entities were “key investors” in both capital raisings. Barclays entered two advisory arrangements as part of the Qatari entities' agreement to participate in the capital raisings. The arrangements involved payments to one of the Qatari entities totalling £322 million over three and five years respectively, the City watchdog's statement 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,” Mark Steward, executive director of enforcement and market oversight, said. 

“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,” he added.

Qatari payment
These payments were calculated specifically with reference to the Qataris’ financial demands for investing in the capital raisings, not the value of the advisory services that Barclays expected to receive under the agreements, the FCA said.

Barclays published announcements and prospectuses concerning the capital raisings and, in relation to the October capital raising, a shareholder circular. 

“Barclays disclosed that it had entered into an advisory agreement in June 2008, but did not disclose the October agreement, and did not disclose the payments under the capital raisings or their connection to the Qatari entities’ participation in the capital raisings,” the FCA said.

Had the payments been disclosed, they would have materially affected the terms of the capital raisings, more than doubling the disclosed level of payments due to the Qatari entities in connection with their participation in the June capital raising and tripling the payments due to them in connection with their participation in the October capital raising.

“The FCA considers that it would have been highly relevant information to shareholders, investors and the wider market, especially in October 2008, in circumstances where the disclosed costs were already perceived to be very expensive,” the regulator said.

The FCA warned the bank in 2013. The case was paused at that point pending the resolution of criminal proceedings brought by the Serious Fraud Office against Barclays and others. The case restarted when those proceedings ended in 2019.

The Upper Tribunal will determine whether to uphold the FCA’s decisions against Barclays or not and whether there are any other actions that should be taken by the FCA,” the regulator continued. “The Upper Tribunal's decision will be made public on its website following a hearing. Accordingly, the action outlined in the decision notices will have no effect pending the determination of the cases by the Upper Tribunal,” the FCA said.