Waqar Siddique, a former managing director at the defunct private equity company Abraaj Group, has reached a settlement with the Dubai Financial Services Authority.
Mr Siddique was fined $1.15 million by the DFSA in January 2022 and also prohibited by it from operating in the Dubai International Financial Centre, for “serious failings” in respect of Abraaj.
He subsequently referred the DFSA’s findings for review by the independent Financial Markets Tribunal. As a result of a settlement he reached with the DFSA on October 14, Mr Siddique withdrew his FMT reference and will not contest the DFSA’s findings, the regulator said on Wednesday.
The settlement includes arrangements to secure payment to the DFSA, it said.
The Abraaj Group, which was founded in 2002 and claimed to manage about $14 billion of assets at its peak, was the Middle East’s biggest private equity firm and one of the world’s most active emerging market investors, with interests across Africa, Asia, Latin America and the Middle East.
It was forced into liquidation in 2018 after investors, including the Bill & Melinda Gates Foundation, commissioned an audit to investigate alleged mismanagement of money in its $1bn healthcare fund.
That probe served to deepen scrutiny of the company, and allegations of misappropriation of funds secured from US investors attracted the attention of the Securities and Exchange Commission, as well as other US authorities.
Mr Siddique, who has not been a UAE resident for a number of years, was a member of the Abraaj Group’s senior management team, along with the company's founder Arif Naqvi, who was fined more than $135m and also banned from conducting business in the DIFC “for serious failings” in respect to the company.
Mr Naqvi is in the UK facing extradition to the US, where he faces a trial for fraud and money laundering.
Earlier this month, the DFSA fined KPMG LLP $1.5m and former audit principal Milind Navalkar $500,000 for failing to follow international standards during audits of ACLD for a number of years up to October 2017.
In November 2021, the DFSA fined former Abraaj managing partner Mustafa Abdel-Wadood $1.9m for breaching its rules and deceiving investors, in addition to banning him from conducting any financial services-related business in the DIFC.
He is the only defendant who has appeared in a US court, pleading guilty to seven counts of an indictment against him. He is co-operating with the US government and is out on $10m bail in New York as he awaits sentencing.
In addition to his senior role at Abraaj Group, Mr Siddique was also an authorised individual as Abraaj Capital Limited’s licensed director and was “knowingly involved in certain Abraaj Investment Management Limited (AIML) and Abraaj Capital Limited (ACLD) breaches”, the DFSA said.
Mr Siddique was “knowingly involved in AIML misleading and deceiving investors over the use of their monies within funds managed by Abraaj, including by being a signatory to loan agreements used to produce misleading bank balance confirmations and misleading financial statements”, the regulator said.
He also was “knowingly involved in ACLD’s contraventions of not maintaining its capital requirements” and over a five-year period authorised the majority of temporary cash transfers at quarterly reporting period ends, the DFSA said.
“It continues to be a priority of the DFSA to hold senior individuals to account,” said Ian Johnston, chief executive of the DFSA.
“We have pursued payment of the fine even though the individual and his assets are no longer in the UAE. This demonstrates the DFSA’s commitment to pursuing action against subjects and collecting the fines imposed on them, irrespective of their locations.”
