Barclays in new court battle over £50m fine for ‘secret’ Qatar deal

The controversy over Barclays’ efforts to avoid a government bailout during the 2008 crisis will return to the spotlight on Monday when the bank fights a £50 million fine over allegedly secret payments it made to Qatari investors.
The FTSE 100 bank is challenging the Financial Conduct Authority in court over the regulator’s provisional decision two years ago to levy a penalty on Barclays for “reckless” conduct. The case, which is being heard in the Upper Tribunal, is slated to last three weeks and John Varley, 68, the former Barclays chief executive who led the bank through the financial crisis, is due to appear as a witness for the lender.
It is the latest in a string of courtroom battles over actions that Barclays took 16 years ago, when the global banking system was on the brink.
While its rivals NatWest, which was then called Royal Bank of Scotland, and Lloyds Banking Group were forced into taxpayer bailouts during the crisis, Barclays avoided a similar part-nationalisation by organising two cash calls totalling £11.8 billion in June 2008 and October 2008 with investors including Qatar.
At issue is side deals that Barclays allegedly struck with the Qataris to secure their participation in the fundraisings, in which the bank agreed to pay Qatar £322 million in fees.
The Financial Conduct Authority has previously claimed that Barclays’ conduct “was reckless and lacked integrity” because it failed to reveal these fees, even though they “would have had a material impact on the terms of the capital raisings as disclosed”.
In a notice published in 2022, when the regulator announced its intention to fine the bank, it 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 Serious Fraud Office previously attempted to prosecute Barclays and four former senior executives at the lender, including Varley, over the side deals. However, the charges against the bank were dismissed in 2018 and the former executives were acquitted in 2019 and 2020.
The payments were also at the centre of a civil case in the High Court against Barclays brought by Amanda Staveley, a financier who had involved Abu Dhabi in the October 2008 fundraising. While she lost her damages claim against the bank in February 2021, the judge found that Barclays was “guilty of serious deceit”.
The FCA and Barclays did not comment on the case in the Upper Tribunal, a court that handles appeals against decisions made by regulators including the FCA.