The story
Founded by Arif Naqvi in 2002.1
History
The Abraaj Group was founded in 2002 by Pakistani businessman Arif Naqvi with US$3 million in capital. In April 2015, the firm closed a US$990 million Sub-Saharan Africa fund, its third in the region according to the company. Combined with US$375 million raised in August 2015 for a fund to focus on North Africa, the two funds give Abraaj just under US$1.4 billion to invest in Africa, a record sum raised in a single year.
In July 2016, the firm announced that it raised $526 million for investments in Turkey through Abraaj Turkey Fund I. Abraaj also launched its $1 billion Abraaj Growth Markets Health Fund (AGHF) to build affordable and accessible health eco-systems for middle and low-income communities in Sub Saharan Africa and South Asia.
In 2018 the firm was hit by turmoil, as it was revealed that several limited partners including the Gates Foundation were investigating its misuse of investor funds and appointed an auditor to trace the money. This led to the departure of the CFO as well as the CEO to handover his role at the fund business.
Abraaj was hit by a $188 million loss for the nine months until the end of March with Abraaj’s debts standing at $1.1 billion, including $501.4 million to unsecured creditors and $572.4 million to secured creditors. In April 2019, a third director, Sivendran "Sev" Vettivetpillai, was arrested.
Eventually, Abraaj's various funds were sold to other private equity firms. Colony Capital took over Abraaj's Latin America business. Actis Capital took over the private equity businesses in the Middle East, Africa and Asia, and TPG Capital's Rise Fund took over the firm's healthcare business.
2019
During April, the US regulator Securities and Exchange Commission filed a complaint in the U.S. District Court for the Southern District of New York that Abraaj CEO, Arif Naqvi, had taken ~US$230 million from Abraaj Growth Markets Health Fund and co-mingled it with Abraaj Investment Management’s corporate funds to cover cash shortfalls for corporate expenses and other purposes unrelated to the health fund.
Founder and ex-CEO - Pakistani national, Arif Naqvi, a resident of the United Kingdom was subsequently arrested in London during April upon his arrival from Pakistan and faces extradition hearings to the US to face the SEC complaint. He was subsequently released in May on bail of £15 million, has to wear an ankle bracelet and is restricted to his London residence.
In July, the Dubai financial services regulator, Dubai Financial Services Authority fined Abraaj a record $314.6 million for deceiving investors and carrying out unauthorized activities, but it also acknowledged that it may never be able to recover the fine due to Abraaj's liquidation.
Read the full text
During August Abraaj ex-CEO, Arif Naqvi, was sentenced to three years of imprisonment by a UAE court, in absentia, in the misdemeanour case filed against him by Air Arabia PJSC, where he was a former Board member.
Sivendran (Sev) Vettivetpillai, a British national was arrested at his home in April 2019 and pled guilty to charges of serious financial crimes relating to Abraaj at US District Court in the Southern District of New York via video conference from the UK. An Abraaj senior employee since 2012 after his investment firm Aureos Capital was acquired by Abraaj, Sev focused on impact investing, mainly within its healthcare fund.
2021
During January, Senior District Judge Emma Arbuthnot of Westminster Magistrates’ Court ruled there were no bars to extradition of Arif Naqvi to the US under several articles of Britain’s 2003 Extradition Act, and ordered the case to be sent to the United Kingdom's Secretary of State for a decision as to whether he should be extradited.
During July, UAE Emirate Dubai's financial services regulator, Dubai Financial Services Authority imposed a $1.7 million fine on the former Chief Financial Officer of Abraaj, Ashish Dave, for his involvement in the failed private equity firm’s “misleading and deceptive conduct”. Ashish Dave alternated between stints at Abraaj's auditor, global accounting firm KPMG and at Abraaj as its chief financial officer, a job he held twice. At least two other members of Abraaj’s finance team in Dubai also previously worked for KPMG, including the son of chairman and chief executive Vijay Malhotra of affiliate, KPMG Lower Gulf Ltd.
During November, two units of Abraaj that are now in liquidation, filed a lawsuit in Dubai against KPMG LLP for damages of US$600 million alleging that KPMG accountants “failed to maintain independence and an appropriate attitude of professional scepticism,” and breached their duty of care when auditing the private-equity firm
Mustafa Abdel Wadood, an Egyptian and Maltese national, who was senior executive officer (SEO) of Abraaj Capital Limited (ACLD), the Dubai Financial Services Authority (DFSA) authorised unit of the Abraaj Group was fined $1.6 million by the DFSA] for breaching its rules and deceiving investors.
The DFSA also banned him from conducting any financial services-related business in or from the Dubai International Financial Centre. From July 2006 to February 2018 he held various roles including managing partner, global head of private equity and board member. Mustafa is already out in the US on a $10 million bail since 2019 after having pleaded guilty, and his sentencing has been postponed by the US Attorney for the Southern District of New York, pending the outcome of an extradition request from the UK of the company’s founder, Arif Naqvi.
Judge Philippa Whipple of the UK High Court adjourned the matter of extradition of Abraaj founder, Arif Naqvi, until a similar point of law was resolved in another high-profile extradition case - that of Nirav Modi, an Indian diamond tycoon.
2022
During January, the Dubai financial regulator Dubai Financial Services Authority fined former CEO, Arif Naqvi, UAE Dirham 497.9 million (~US$135.6 million) and its former COO, Waqar Siddiqui, UAE Dirham 4.2 million (~US$1.2 million) over their role in the collapse of Abraaj.
During October, Waqar Siddique, a former Managing Director at the firm settled the fine of US$1.15 million imposed on him by the Dubai financial regulator, Dubai Financial Services Authority, in January for “serious failings” in respect of Abraaj.
2023
On 8 March 2023, former CEO Arif Naqvi lost his challenge to the extradition ordering him from London to the United States, as a UK High Court Judge refused him permission to bring a judicial review against the 2021 order. This means that the extradition order authorized in 2021 by the then UK Home Secretary Priti Patel will be executed, and Naqvi will be sent to a US prison to undergo his trial on fraud allegations by US authorities.
From Wikipedia’s article on The Abraaj Group, shared under CC BY-SA 4.0.4