Barclays fined £50m for secret Qatar payments

Barclays was branded ‘reckless and lacking integrity’ as it was fined £50m over its secretive deals with Qatar during the financial crisis. 

Desperate to avoid a bailout in 2008 like rivals Natwest and Lloyds, Barclays paid £322m in ‘advisory fees’ to a Qatari firm, allegedly in return for a £4billion investment. 

While Barclays announced the cash injection by Qatar, it did not disclose the fees it had paid. 

Fine: While Barclays announced the cash injection by Qatar, it did not disclose the fees it had paid

The Financial Conduct Authority (FCA), which has been investigating the dealings since 2013, said the payments would have been ‘highly relevant information to shareholders, investors and the wider market’. 

It said this was particularly so given the disclosed costs of the fundraising ‘were already perceived to be very expensive’. 

Mark Steward, executive director of enforcement at the FCA, said: ‘At the height of the financial crisis, 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.’ 

Barclays said it would appeal the ruling. 

The Qatar saga has dogged the lender for years and seen it dragged into several court cases.

In 2020, the bank was unsuccessfully sued by Amanda Staveley – a financier acting on behalf of Abu Dhabi investors – when she claimed the bank offered her client a worse deal than it did to Qatar. Barclays was ‘guilty of fraudulent misrepresentation’, a judge ruled, but Staveley was unable to claim damages because the court said her firm would have been unable to finance the deal anyway. 

Even so, the case proved bruising for Barclays as it laid bare sexist attitudes held by former bankers. Stephen Jones, a Barclays executive at the time, labelled Staveley ‘thick as s***’ and referred to her ‘large breasts’ in a call with a colleague. Roger Jenkins, the former chairman of Barclays’ Middle East business who earned the nickname ‘Big Dog’ for once being one of Britain’s top-paid bankers, referred to Staveley as a ‘tart’. 

Critics claimed the fees paid to Qatar, in two tranches in 2008, allowed the Gulf state to purchase Barclays shares at a much lower price than was available to other investors. The investment was crucial to Barclays, which like other banks faced a cash crunch during the financial crisis as the money markets dried up. 

Qatar’s backing of the bank helped to pave the way for others to follow suit, including Sheikh Mansour of Abu Dhabi, Singapore’s state investor Temasek and Japan’s Sumitomo Mitsui Banking Corp. In total, Barclays raised around £11billion across two capital raisings in 2008.

This post first appeared on Dailymail.co.uk