Barclays’ finance director, Chris Lucas, is under investigation by the Financial Services Authority (FSA) over the fees paid when the bank undertook two rounds of fund raising during the height of the financial crisis, in order to avoid a state bailout.
In a statement, Barclays Bank said that the FSA probe involves four current and former senior employees, including Lucas, and relates to ‘the sufficiency of disclosure in relation to fees payable under certain commercial agreements and whether these may have related to Barclays capital raisings in June and November 2008'.
In June 2008, the bank raised £4.5bn through an issue of new shares, including £2bn from the Gulf state of Qatar, while in November 2008 it raised a further £6.8bn from another group of Middle Eastern investors.
According to the Guardian, the FSA is looking at key paragraphs in documents linked to the June 2008 fundraising, which cite ‘an agreement for provision of advisory services’ by Qatar Investment Authority to Barclays in the Middle East and ‘to have agreed to explore opportunities for a co-operative business relationship’ with Sumitomo Mitsui Banking Corporation.
The document also states that ‘Barclays and Qatar Holding have entered into an agreement for the provision of advisory services by Qatar Holding to Barclays in the Middle East’.
The total fees disclosed for the June fundraising were about £100m, while for the November 2008 fundraising, the bank provided five separate disclosures of fees that amounted in total to around £300m.
In a statement, Barclays said it ‘considers that it satisfied its disclosure obligations and confirms that it will co-operate fully with the FSA's investigation’, which is expected to last for several months.
(Accountancy Live, 30 July 2012)
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