Abraaj Group issue: Probe focuses on senior management, those who failed to report irregularities

By News Report
July 24, 2019

DUBAI: The Dubai Financial Services Authority (DFSA) has said its investigation into the collapsed Abraaj Group is focusing on the buyout firm’s senior management and people who failed to report irregularities, international media reported.

“We will use all of our powers to deal with those who are found to be culpable,” the regulator said in its 2018 annual report published on Tuesday. “This investigation is highly complex, on a wide scale and is being pursued vigorously.”

“We remain proactive in our regulatory risk-based approach and are vigilant in our ongoing efforts to uphold a high standard of financial discipline throughout the centre,” the DFSA said. “We are continually working to establish clarity in all our regulations, and place significant importance on strict but fair enforcement of these rules.”

Dubai-based Abraaj, which once managed about $14 billion, was forced into liquidation last year after being accused of mismanaging investor funds.

Before that, it had been one of the world’s most influential emerging-market investors with stakes in healthcare, clean energy, lending and real estate across Africa, Asia, Latin America and Turkey.

Abraaj’s former managing partner Mustafa Abdel-Wadood pleaded guilty to conspiracy charges in the US last month, admitting that he lied to investors across the globe in an attempt to hide losses and raise more money. Five other executives, including founder and former CEO Arif Naqvi, have also been charged in the US.

The DFSA, as the regulator is known, doesn’t have criminal jurisdiction, unlike US regulators.

“Our supervision and enforcement teams devoted considerable time and effort to investigating the conduct of the affairs of the private equity firm, Abraaj Capital Limited, and its related parties,” DFSA CEO Bryan Stirewalt said in the report. The DFSA said in April that was communicating with the US Securities and Exchange Commission over the charges against Abraaj’s former top executives.