LONDON: The British arm of a charity set up by Abraaj founder Arif Naqvi is set to wind up its operations as it faces scrutiny from UK regulators following the collapse of the private equity giant, a UAE media outlet reported on Saturday.
The Charity Commission said it was “assessing information” following the arrest of Naqvi on US fraud charges and would speak with trustees of the Aman Foundation UK about potential risks to the charity.
Arif Naqvi, 58, was detained on April 10 at London’s Heathrow Airport after flying in from Islamabad and faces extradition to the US for alleged fraud in connection with the collapse of his Dubai-based private equity group.
Just days before, Naqvi’s wife, Fayeeza, described as the chair of trustees for the Aman Foundation UK, is understood to have canvassed opinion among colleagues about whether the charity should continue.
The British charity raised money for the larger Aman Foundation set up in Pakistan by the Naqvi family in 2008 to deliver health and education programmes in that country. The couple won a prize from French banking group BNP Paribas for their “individual philanthropy” in 2015 in connection with their work with the Aman Foundation.
Its work has included supplying a fleet of ambulances in a country where government health spending is among the lowest in the world.
But lawyers for the US authorities identified the Aman Foundation as a potential beneficiary for the “improper use” of $1 million (Dh3.67m) of investors’ money after Arif Naqvi asked the Abraaj cash controller about diverting money from one fund to cover shortfalls elsewhere, according to court documents.
Aman Foundation UK had offices at the Abraaj Group London’s headquarters in Mayfair – home to the most expensive commercial property in London – which was closed last year as part of insolvency cost-cutting measures.
Aman Foundation UK, which spent more than £2m (Rs368 million) in 2016-17, also moved out of its office at Grosvenor Gardens, close to Buckingham Palace in central London, in December 2017, according to records held by the office supplier.
The charity has also failed to file its accounts which were due at the end of April. Late filing “can put off potential donors, funders or volunteers”, according to official guidance from the UK regulator, which will remind trustees of their “legal duties” to lodge accounts on time.
A spokesperson for the Charity Commission said: “We are currently assessing information and will be engaging with the charity’s trustees to assess their response to this matter and any potential risks to the charity.”
There is no suggestion of financial wrongdoing at the Aman Foundation UK but a source close to the charity said its likely winding up followed a failure by fund-raisers to secure significant sums to fund its plans. “This [UK] charity has never really done very much,” the source said. “It’s been pretty much of a non-event.”
It is understood that Naqvi had no involvement in the running of the UK arm of the charity and is not listed as a trustee.
He is accused by US authorities of playing the lead role in a scheme to defraud investors in funds run by the Abraaj Group and of personally benefiting to the tune of hundreds of millions of pounds.
The Dubai-based company managed up to $14 billion in assets before its collapse following investors raising concerns about mismanagement of funds. Its demise represented the world’s largest private equity insolvency.
Mr Naqvi denies the allegations but has so far been unable to raise £15m to secure his freedom during an extradition process.
His lawyers cited his “philanthropic endeavours” when they sought bail, according to court documents.
Speaking before his arrest, Mr Naqvi sought to deflect attention from his family’s charitable works in the wake of the Abraaj collapse.
He claimed to The National that raising questions about the foundation’s finances could trigger a series of events “that could land up with someone being denied the ability to go to hospital and die by the roadside”.
He said: “The foundation is by the grace of God getting sufficient donations from the community to be able to continue its work without a single hiccup. That speaks volumes for its work, right?”
Naqvi did not respond to an emailed request for comment.
Meanwhile, Arif Naqvi, remains in custody after his lawyer said that he was not able to pay a £15 million (approx Rs2.77 billion) security bond, the largest of its kind ever ordered by a British court.
In a hearing at Westminster Magistrates' Court on Friday, Hugo Keith QC, Naqvi’s lawyer, said the amount the court was asking for security bond was “unprecedented” and said “although we are inching towards paying it, we are not there yet”.
However, £650,000 in surety money was paid in court by three associates of the former Abraaj chief executive.
The three sureties are Javed Ahmed, a Pakistani American businessmen and former CEO of British multinational agribusiness Tate & Lyle; Asif Rangoonwala, founder of South Street Asset Management and Malcolm Beckett, who works in the property business.
Javed Ahmed and Rangoonwala agreed to pay £300,000 in surety each in court, while Beckett said he would pay £50,000.
The details of the sureties were agreed two weeks ago, according to Keith.
Javed Ahmed and Rangoonwala said they had known Arif Naqvi for over 30 years each, while Beckett said that he had known him for 18 years and their wives went to university together.
Naqvi attended the hearing on Friday via video call but remained mainly silent throughout the morning.
He has won bail last on the condition of him paying the bond. His bail conditions will mean he has to remain at his West London home for 24 hours a day and will have to wear an electronic tag.
He would also have to hand over his passport and not apply for any additional travel documents. His current travel documents were seized at the time of arrest.
Judge Tamweer Ikram then amended the conditions so that they include access to a mobile phone.
“I will grant you bail. You will, however, remain in custody until these conditions are fully met,” he said.
Naqvi faces up to 45 years in US prisons if found guilty of conspiracy and fraud charges connected to the collapse of the Abraaj Group last year. He denies the charges brought in the US.
Mr Naqvi is fighting extradition over the charges.
A spokesperson told The National: “Mr Naqvi maintains his innocence, and he fully expects to be cleared of any charges. For almost a year since the commencement of the provisional liquidations, he has been working tirelessly to maximise returns for Abraaj’s creditors.”
Founded in 2002, Abraaj grew to become one of the world’s most influential emerging-market investors, with stakes in health care, clean energy, lending and real estate across Africa, Asia, Latin America and Turkey.
Naqvi’s next extradition hearing is on June 12.
Naqvi is one of several Abraaj officials caught up in a probe of what had been the Middle East’s biggest private-equity fund.
Mustafa Abdel-Wadood, the former managing partner of the private equity firm, was granted bail by a New York judge on April 30 after he put up two homes as security for a $10 million bond. The Wall Street Journal reported on Friday that Egyptian billionaire Naguib Sawiris was one of the guarantors of the $10 million bail bond for Abdel-Wadood.
Abdel-Wadood - as well as Sev Vettivetpillai, also a former managing partner - is accused by US prosecutors of inflating Abraaj's fund positions to US investors to attract more capital.
Abdel-Wadood's detention in New York last month triggered other arrests over the collapsed company.
Sawiris is executive chairman of Cairo-based Orascom Investment Holding.
According to the paper, Abdel-Wadood became acquainted with Sawiris when they worked together in their native Egypt decades ago.
Sawiris is the former chief executive of Orascom Telecom and the Sawiris family-owned Orascom conglomerate spans construction, tourism and manufacturing.
Abdel Wadood joined Abraaj Group from Egyptian investment banks EFG Hermes, where he was chief executive for the UAE and prior to that, head of investment banking. Before this, he co founded Sigma Capital and had spent eight years at the Orascom Group. He was also a founding board member of Orascom Telecom.
Sawiris said through a spokeswoman that he provided real estate to help secure Abdel-Wadood’s bail. He didn’t give details about the property.
“He is a longtime friend of mine and worked with me in the nineties,” Sawiris said.
He was one of four bail guarantors for Abdel-Wadood, the Journal said. The bond included an apartment in New York and a home on Long Island, owned by two of the cosigners.
Abdel-Wadood will go on trial on November 4 and will be confined to a Manhattan apartment, thought to be one of the homes used to cover the bail requirements.
