Abraaj founder fined staggering $135M by Dubai regulator

Jan 26, 2022, 10:46 AM | Updated: Jan 27, 2022, 6:45 am
FILE - Arif Naqvi, the founder and CEO of the Abraaj Group, speaks at the Bloomberg Global Business...

FILE - Arif Naqvi, the founder and CEO of the Abraaj Group, speaks at the Bloomberg Global Business Forum, Sept. 20, 2017, in New York. A regulatory body in Dubai said Thursday, Jan. 27, 2022, it is fining the Pakistani-born founder of Abraaj Group, the now defunct Mideast private equity firm accused of fraud, a staggering penalty of $135.5 million. (AP Photo/Mark Lennihan, File)

(AP Photo/Mark Lennihan, File)

DUBAI, United Arab Emirates (AP) — A regulatory body in Dubai said Thursday it is seeking to impose a staggering fine of $135.5 million on the Pakistani-born founder of Abraaj Group, the now defunct Mideast private-equity firm accused of fraud.

The Dubai Financial Services Authority DFSA said CEO Arif Naqvi was issued the financial penalty “for serious failings.” The regulator also said it was fining former Abraaj senior manager and one-time Chief Operating Officer Waqar Siddique $1.15 million.

The DFSA said the financial penalty reflects the seriousness of Naqvi’s alleged misdoings and is based on his earnings from the Abraaj Group.

Although the fine is only provisional, it is the latest twist in a saga that has spanned multiple continents and touched some of the world’s wealthiest people. Abraaj managed $14 billion for investors at its peak before its collapse in 2018.

Naqvi and Siddique dispute the regulator’s decision and have referred the notices to the Financial Markets Tribunal, where the parties will present their cases. The DFSA’s decisions are therefore provisional.

Two men attempted unsuccessfully through the tribunal to prevent the notices of fines from being published and to hold the tribunal hearings in private.

Naqvi has asserted his innocence as he fights extradition from the U.K. to the U.S., where prosecutors allege that Abraaj Group enticed American investors with the promise of socially responsible investments when instead it engaged in massive fraud. He’s also accused of taking hundreds of millions of dollars from Abraaj for personal gain.

Some of the U.S. investors allegedly defrauded include the Bill & Melinda Gates Foundation and a U.S. government agency that facilitates American business investments in hospitals in developing countries.

A former top executive at the Dubai-based firm told a U.S. court in 2019 that he was wrong to be silent as Abraaj Group tried to recover from massive cash shortfalls by exaggerating its finances to win over new investors. After signing a cooperation deal with U.S. prosecutors, Egyptian-born Mustafa Abdel-Wadood, who oversaw Abraaj investments as a managing partner, pleaded guilty to charges including racketeering conspiracy and securities and wire fraud.

Naqvi founded Abraaj Group in 2002, from which it grew to become the largest private-equity firm in any emerging market. He was the firm’s largest shareholder and its ultimate decision maker, according to the regulator.

The regulator alleges that Navqi used a Cayman Islands-registered firm to mislead investors, withheld sale proceeds from investors less likely to complain or challenge the firm, drafted misleading statements to investors to cover up misuse of their funds, and was involved in the cover-up of a $400 million shortfall by borrowing money to produce bank balances and statements.

Abraaj Group operated out of Dubai’s financial free zone known as Dubai International Finance Center. Known as the DIFC, it is the financial heart of Dubai characterized by sleek mirrored business towers, Michelin-star restaurants and luxury hotels for traveling executives.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Official: 41 indicted in $58M Puerto Rico drug operation

SAN JUAN, Puerto Rico (AP) — A federal grand jury indicted 41 suspected gang members in Puerto Rico accused of smuggling drugs to the U.S mainland as part of a $58 million operation, authorities said Wednesday. Those arrested include several of the U.S. territory’s suspected drug trafficking leaders, according to Joseph González, special agent in […]
1 day ago
Associated Press

Boat with reported 842 Haitian migrants reaches Cuba

HAVANA (AP) — More than 800 Haitians who apparently were trying to reach the United States landed instead in central Cuba, government news media said Wednesday, reporting that all had been packed onto a single vessel. It appeared to be the largest group yet in a swelling exodus of people from crisis-stricken Haiti. The U.S. […]
1 day ago
FILE - Tesla and SpaceX Chief Executive Officer Elon Musk speaks at the SATELLITE Conference and Ex...
Associated Press

Twitter shareholders to meet amid Elon Musk’s takeover drama

Twitter’s regularly scheduled shareholder meeting Wednesday won’t include a vote on Tesla billionaire Elon Musk’s $44 billion bid for the social platform. That vote will take place at a yet-undetermined date in the future. But the drama surrounding his offer — almost all of it created by Musk himself — might spill over into today’s […]
1 day ago
Associated Press

Editorial Roundup: United States

Excerpts from recent editorials in the United States and abroad: May 23 The Washington Post say paused Disinformation Governance Board was doomed from its inception The Disinformation Governance Board has been put on pause — leaving skeptics of the new body within the Department of Homeland Security sighing with relief. The board was from the […]
1 day ago
FILE - Pennsylvania Republican Senate candidates David McCormick, left, and Mehmet Oz during campai...
Associated Press

Oz, McCormick race heads toward recount in Pa Senate primary

HARRISBURG, Pa. (AP) — Pennsylvania’s top election official was expected to certify Wednesday that the margin between the top two candidates in last week’s Republican primary for U.S. Senate was tight enough to trigger a recount. The state’s acting secretary of state, Leigh Chapman, had a news conference planned for Wednesday afternoon. Celebrity heart surgeon […]
1 day ago
FILE - Kansas City Federal Reserve President Esther George listens during a closed door meeting wit...
Associated Press

Kansas City Fed President Esther George announces retirement

WASHINGTON (AP) — The president of the Federal Reserve Bank of Kansas City, Esther George, said Wednesday that she will retire in January, as required by the Fed’s mandatory retirement rules. George, who has typically supported higher interest rates to ward off inflation — a “hawk,” in Fed parlance — spent 40 years at the […]
1 day ago

Sponsored Articles

...

Anacortes – A Must Visit Summertime Destination

While Anacortes is certainly on the way to the San Juan Islands (SJI), it is not just a destination to get to the ferry… Anacortes is a destination in and of itself!
...

Ready for your 2022 Alaskan Adventure with Celebrity Cruises?

Celebrity Cruises SPONSORED — A round-trip Alaska cruise from Seattle is an amazing treat for you and a loved one. Not only are you able to see and explore some of the most incredible and visually appealing natural sights on the planet, but you’re also able to relax and re-energize while aboard a luxury cruise […]
...

Compassion International Is Determined to ‘Fill’ a Unique Type of Football ‘Stadium’

Compassion International SPONSORED — During this fall’s football season—and as the pandemic continues to impact the entire globe—one organization has been urging caring individuals to help it “fill” a unique type of “stadium” in order to make a lasting difference in the lives of many. Compassion International’s distinctive Fill the Stadium (FtS, fillthestadium.com) initiative provides […]
...

What are the Strongest, Greenest, Best Windows?

Lake Washington Windows & Doors SPONSORED — Fiberglass windows are an excellent choice for window replacement due to their fundamental strength and durability. There is no other type of window that lasts as long as fiberglass; so why go with anything else? Fiberglass windows are 8x stronger than vinyl, lower maintenance than wood, more thermally […]
...

COVID Vaccine is a Game-Changer for Keeping our Kids Healthy

Snohomish Health District SPONSORED — Cheers to the parents and guardians who keep their kids safe and healthy. The dad who cooks a meal with something green in it, even though he’s tired and drive-thru burgers were tempting. The mom who calms down the little one who loudly and resolutely does NOT want to brush […]
...
Experience Anacortes

Coastal Christmas Celebration Week in Anacortes

With minimal travel time required and every activity under the sun, Anacortes is the perfect vacation spot for all ages.
Abraaj founder fined staggering $135M by Dubai regulator