May 28, 2022
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Dubai regulator issues massive fine on Abraaj founder

Dubai regulator issues massive fine on Abraaj founder

DUBAI, United Arab Emirates — A regulatory physique in Dubai mentioned Thursday it’s fining the Pakistani-born founder of Abraaj Group, the now defunct Mideast private-equity agency accused of fraud, a staggering penalty of $135.5 million.

The Dubai Monetary Providers Authority DFSA mentioned CEO Arif Naqvi was slapped with the monetary penalty “for serious failings.” The regulator additionally mentioned it was fining former Abraaj senior supervisor and one-time Chief Working Officer Waqar Siddique $1.15 million.

The DFSA mentioned the fine displays the seriousness of Naqvi’s alleged misdoings and relies on his earnings from the Abraaj Group.

Though the fine is barely provisional, it’s the newest twist in a saga that has spanned a number of continents and touched among the world’s wealthiest individuals. Abraaj managed $14 billion for buyers at its peak earlier than its collapse in 2018.

Naqvi and Siddique dispute the regulator’s choice and have referred the notices to the Monetary Markets Tribunal, the place the events will current their instances. The DFSA’s selections are subsequently provisional.

Two males tried unsuccessfully by the tribunal to forestall the notices of fines from being revealed and to carry the tribunal hearings in non-public.

Naqvi has asserted his innocence as he fights extradition from the U.Ok. to the U.S., the place prosecutors allege that Abraaj Group enticed American buyers with the promise of socially accountable investments when as an alternative it engaged in massive fraud. He is additionally accused of taking tons of of thousands and thousands of {dollars} from Abraaj for private acquire.

Among the U.S. buyers allegedly defrauded embody the Invoice & Melinda Gates Basis and a U.S. authorities company that facilitates American enterprise investments in hospitals in growing nations.

A former prime government on the Dubai-based agency instructed a U.S. court docket in 2019 that he was mistaken to be silent as Abraaj Group tried to get well from massive money shortfalls by exaggerating its funds to win over new buyers. After signing a cooperation take care of U.S. prosecutors, Egyptian-born Mustafa Abdel-Wadood, who oversaw Abraaj investments as a managing companion, pleaded responsible to costs together with racketeering conspiracy and securities and wire fraud.

Naqvi based Abraaj Group in 2002, from which it grew to change into the biggest private-equity agency in any rising market. He was the agency’s largest shareholder and its final choice maker, in accordance with the regulator.

The regulator alleges that Navqi used a Cayman Islands-registered agency to mislead buyers, withheld sale proceeds from buyers much less prone to complain or problem the agency, drafted deceptive statements to buyers to cowl up misuse of their funds, and was concerned within the cover-up of a $400 million shortfall by borrowing cash to provide financial institution balances and statements.

Abraaj Group operated out of Dubai’s monetary free zone referred to as Dubai Worldwide Finance Middle. Often called the DIFC, it’s the monetary coronary heart of Dubai characterised by modern mirrored enterprise towers, Michelin-star eating places and luxurious inns for touring executives.

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