Barclays has received a broadside from the City after shareholders voted to approve a controversial £7 billion fund-raising that will put almost a third of the bank into Middle East ownership.
The four key votes at the company's extraordinary meeting in London showed that shareholders representing more than one in five of the votes cast either opposed or abstained on the plans.
The bank shunned the Government's bail-out cash to welcome Abu Dhabi royalty and Manchester City owner Sheikh Mansour Bin Zayed Al Nahyan as an investor, and gain extra funds from the Qatari Investment Authority and Challenger, which represents Qatar's royal family.
The fundraising has drawn fire as institutional investors were initially excluded from plans to raise £3 billion through the issue of reserve capital instruments (RCIs) to the Middle East trio.
Barclays needed 50% of the votes cast to support it for three of the four resolutions. In the fourth vote, the bank was required to have 75% support from the votes that were cast. For all four polls, abstentions - which were not counted in the calculation of the proportion of votes for and against the move - made up around 10% of all votes cast. Of the votes that were counted, around 80% were in favour.
Earlier, chairman Marcus Agius faced heckling from investors who had gathered in London to vote on the deal. Some were angry not to have had the opportunity to question management, and security guards were called to pacify one shareholder as he approached the panel. And during the question and answer session, the chairman was asked several times if he would resign.
Barclays will pay 14% a year on the RCIs in return for the capital - more expensive than the 12% coupon on the Government's preference shares.
The higher cost and breach of pre-emption rights - the principle that existing investors should be given the first chance to participate in fundraising - has angered shareholders.
Mr Agius defended the move saying that "in ordinary circumstances" Barclays would have asked for funds in a rights issue - but the turmoil of early October was such that the company needed to act more quickly. "We felt that a rights issue launched in very difficult market conditions - even if it could have been achieved - would have subjected our shareholders to an excessive period of uncertainty," he said.
Read More
Private shareholders said they felt they had been treated as a third class of investor because they were unable to participate in the fundraising. Speaking on behalf of the UK Shareholders' Association, Roger Lawson said: "I deplore the lack of participation of all shareholders in this fundraising."
