Barclays faces £50m fine for breach of listing rules

By Patrick Jenkins and Caroline Binham

Barclays is set to outline that it breached listing rules the last time it raised fresh capital, exposing it to a £50m fine, according to the conclusions of a warning notice sent to the bank by regulators.

The disclosure, in Barclays’ prospectus for a £5.8bn rights issue to be published on Monday, relates to a 2008 fundraising with Qatari investors, which has been under investigation by authorities in the UK and US over suggestions of the bank made improper payments alongside the cash call.

According to people close to the process, Barclays has yet to reach a settlement with the Financial Conduct Authority, which has led the UK regulatory inquiry, but the rights issue prospectus will detail the warning notice charges and £50m penalty. Listing rule breaches include failing to disclose properly fees paid.

The light cast on the affair will come as further unwelcome news for Antony Jenkins, Barclays’ chief executive. Over recent weeks he has had to reconcile himself to having to raise fresh capital he originally thought he did not need, following intense pressure from the Bank of England’s Prudential Regulation Authority. The bank has already priced the new shares at a deep discount of close to 40 per cent.

Barclays and its advisers appear convinced that investor demand will be healthy, nonetheless, with little if any impact on demand from the Qatari affair.

A twin investigation by the Serious Fraud Office means the FCA will not publish the warning notice for the time being.

The SFO’s criminal investigation into Barclays’ capital call continues, as does a separate inquiry into alleged manipulation of Libor, the London interbank lending rate. The risk to the bank of both investigations includes charges not only against individuals but also against the bank as a corporate entity.

 Copyright The Financial Times Limited 2013.