Athira Sethu
Kochi, 26 November 2024
The UK’s Financial Conduct Authority, or FCA, fined Barclays £40 million ($51 million) after it failed to disclose crucial information regarding its relationships with investors in Qatar during the financial crisis of 2008. At that point, Barclays needed money urgently to avoid the government’s bailout and gave a lifeline to Qatari investors, but the bank failed to flag fees paid to the Qatari entities in the deal.
The FCA found that Barclays had been reckless and lacked integrity in the way it carried out this exercise. In the original decision, the FCA sanctioned Barclays to a fine of £50 million for these failures. Barclays disagreed with the findings, and the fine was appealed. Over time, Barclays withdrew its appeal, though without accepting the FCA’s conclusions.
According to Barclays, a withdrawal of the appeal would be the only move to ensure that its shareholders and other stakeholders were covered after such an extended period. Barclays also said that the fine would have no monumental financial impact on the business.
This is the culmination of the FCA’s long history of investigation against Barclays, based on the bank’s practices during the financial crisis period. The FCA revealed that the bank had violated proper disclosure rules, which are guidelines that help companies observe transparency while raising money. This fine comes on top of Barclays’ failure to act with enough honesty and openness, amid its bid to avoid being bailed out by the state by raising funds from overseas investors.
Barclays does not expect any significant long-term financial impact from the large fine imposed on the bank.
