By: Caroline Binham, Financial Regulation Correspondent
The UK financial watchdog has had to delay a decision over its investigation into Barclays’ arrangements with Qatar at the height of the financial crisis after the bank belatedly turned over thousands of “significant” documents.
The Financial Conduct Authority has this week written to the bank and individuals caught up in the probe to explain that the huge cache of previously undisclosed evidence has pushed back the watchdog’s decision, according to people familiar with the decision.
Simmons & Simmons, the law firm acting for the bank, found thousands of documents, including emails between former top brass at Barclays in the run-up to the bank’s 2008 fundraising, which it conceded last month may be significant, according to those involved in the case who saw Simmons’ letter.
The FCA reopened its probe into Barclays’ 2008 fundraising, where it tapped investors from Qatar and Abu Dhabi for £7.3bn to avoid UK government control, earlier this year after receiving another trove of 100,000 documents. Barclays had previously claimed that these were covered by legal privilege, which keeps confidential advice from lawyers to their clients, even in investigations.
The bank’s side-arrangements with Qatar at the time of the cash call, totalling £2.4bn, have sparked a regulatory and criminal probe, a $1bn lawsuit and a whistleblowing claim.
It is yet another shadow hanging over the bank just as it is facing fresh questions over the judgment of its chief executive, Jes Staley. He is subject to a separate FCA and Bank of England probe into his attempt to uncover the identity of a whistleblower; something he apologised for on Wednesday.
The FCA has already come to an early determination in 2013 that the bank failed to disclose arrangements and fees it paid to Qatari investors in 2008. The watchdog said it would fine Barclays £50m, which the bank said it would contest. But the FCA had to stay its proceedings pending a parallel criminal investigation by the Serious Fraud Office.
The reopening of the FCA’s case file could prompt the regulator to alter its previous conclusions and change the amount of the fine, something that is rare after the regulator has issued preliminary findings. To do so, the FCA would need to present new findings to an internal panel called the regulatory decisions committee.
The deadline for it to do that was previously early May but the recent document disclosure has forced the watchdog to push back the deadline by at least several weeks, those close to the case added.
The FCA and Barclays declined to comment on the delay.
Meanwhile, the SFO’s long-running criminal investigation has missed several deadlines for a charging decision, last set for the end of May.
It is the only UK investigation where the former senior management of a bank faces the possibility of criminal charges over actions during the financial crisis. The SFO confirmed the late-May deadline for any charging decision and declined to comment further.The discovery of the latest document cache was prompted by an order from the High Court in February that the bank disclose key evidence, including personal emails of a former Barclays rainmaker who masterminded the fundraising, to PCP Capital, the company founded by Amanda Staveley that is suing the bank for $1bn.Ms Staveley put the Abu Dhabi side of the deal together. PCP argues in its lawsuit that the bank entered into secret, sham agreements with Qatari investors as a way of inducing them to prop up the bank. PCP maintains it never would have invested had it known about the secret agreements.The bank contends that the additional fees it paid to Qatar were for legitimate services and denies wrongdoing.
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