The Dubai Financial Services Authority ruled earlier that Arif Naqvi had knowingly misled and deceived investors. AP
The Dubai Financial Services Authority ruled earlier that Arif Naqvi had knowingly misled and deceived investors. AP
The Dubai Financial Services Authority ruled earlier that Arif Naqvi had knowingly misled and deceived investors. AP
The Dubai Financial Services Authority ruled earlier that Arif Naqvi had knowingly misled and deceived investors. AP

Dubai tribunal upholds regulator's action against Abraaj founder Arif Naqvi


Massoud A Derhally
  • English
  • Arabic

An independent appeals tribunal has upheld action taken by the Dubai Financial Services Authority against Arif Naqvi, the founder of defunct private equity company Abraaj Group, which was the largest fine ever imposed on an individual by the regulator.

The DFSA fined Mr Naqvi more than $135 million in January 2022 and banned him from conducting business in the Dubai International Financial Centre over “serious failings” in respect to the company and its misconduct.

Mr Naqvi had referred the DFSA’s findings for review by the Financial Markets Tribunal (FMT), which rejected his appeal on December 12, rendering DFSA’s findings from August 2021 as final, the regulator said on Tuesday.

The tribunal found that Mr Naqvi “was centrally involved in a sustained course of unauthorised financial service activities and misleading and deceptive conduct by Abraaj Investment Management Limited (AIML)”, according to the statement.

AIML was a Cayman Islands-registered firm not authorised by the DFSA. In July 2019, the DFSA imposed a fine of more than $299 million on AIML for conducting unauthorised activities in or from the DIFC and misusing investors’ monies.

The tribunal also considered that the $135 million penalty against Mr Naqvi was “unusually high but the remuneration … [he] received was high amidst conduct that was exceptionally serious and the cause of what appears to have been unprecedented harm to the entire community of the DIFC”.

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.

The DFSA found that Mr Naqvi was knowingly involved in misleading and deceiving investors over the misuse of their funds by AIML and had “personally proposed, orchestrated, authorised and executed actions that directly or indirectly misled or deceived the investors”, the regulator said.

Mr Naqvi, according to the DFSA, “instructed the use of investor monies to fund the Abraaj Group’s working capital or other commitments; prioritised the distribution of Abraaj fund sale proceeds and update reports to “noise makers and those who will come back, with the latest being legacy investors and passive voices”.

He was also “central to the cover-up of” a shortfall of about $400 million at two Abraaj funds by temporarily borrowing monies to produce bank balance confirmations and financial statements to mislead auditors and investors, the regulator said.

Mr Naqvi also approved and personally drafted false and misleading statements to investors to cover up the misuse of their funds, the DFSA said.

He approved the change of an Abraaj fund’s financial year-end to avoid disclosing a shortfall of about $201 million and agreed that the justification of aligning the Abraaj fund year-end with that of other Abraaj funds would be “selleable [sic] and compelling” to the limited partners of the fund, the regulator said.

The DFSA found that Mr Naqvi personally arranged to borrow $350 million from one person in an attempt to make the Abraaj Group appear solvent and appease the demands of investors.

“While Mr Naqvi preached about transparency and responsibility, he did not apply those principles in practice,” said DFSA chief executive Ian Johnston.

“The DFSA’s action against him, which was upheld by the FMT, is important in recognising the nature, scale and seriousness of Mr Naqvi’s misconduct, which ultimately led to the collapse of the Abraaj Group.

“Mr Naqvi was the face of the largest private equity firm in the region and the face of impact investing.

“He was in a position of trust and influence and investors relied on him to ensure that the Abraaj Group’s affairs were managed effectively and responsibly.”

Mr Naqvi was a regular attendee of the World Economic Forum in Davos.

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The specs

Engine: 6.2-litre supercharged V8

Power: 712hp at 6,100rpm

Torque: 881Nm at 4,800rpm

Transmission: 8-speed auto

Fuel consumption: 19.6 l/100km

Price: Dh380,000

On sale: now 

ENGLAND SQUAD

Goalkeepers Henderson, Johnstone, Pickford, Ramsdale

Defenders Alexander-Arnold, Chilwell, Coady, Godfrey, James, Maguire, Mings, Shaw, Stones, Trippier, Walker, White

Midfielders Bellingham, Henderson, Lingard, Mount, Phillips, Rice, Ward-Prowse

Forwards Calvert-Lewin, Foden, Grealish, Greenwood, Kane, Rashford, Saka, Sancho, Sterling, Watkins 

The Kites

Romain Gary

Penguin Modern Classics

THE BIO

Bio Box

Role Model: Sheikh Zayed, God bless his soul

Favorite book: Zayed Biography of the leader

Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet

Favorite food: seafood

Favorite place to travel: Lebanon

Favorite movie: Braveheart

The specs: 2019 Mercedes-Benz C200 Coupe


Price, base: Dh201,153
Engine: 2.0-litre turbocharged four-cylinder
Transmission: Nine-speed automatic
Power: 204hp @ 5,800rpm
Torque: 300Nm @ 1,600rpm
Fuel economy, combined: 6.7L / 100km

Multitasking pays off for money goals

Tackling money goals one at a time cost financial literacy expert Barbara O'Neill at least $1 million.

That's how much Ms O'Neill, a distinguished professor at Rutgers University in the US, figures she lost by starting saving for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.

"I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could've had $2 million," Ms O'Neill says.

Too often, financial experts say, people want to attack their money goals one at a time: "As soon as I pay off my credit card debt, then I'll start saving for a home," or, "As soon as I pay off my student loan debt, then I'll start saving for retirement"."

People do not realise how costly the words "as soon as" can be. Paying off debt is a worthy goal, but it should not come at the expense of other goals, particularly saving for retirement. The sooner money is contributed, the longer it can benefit from compounded returns. Compounded returns are when your investment gains earn their own gains, which can dramatically increase your balances over time.

"By putting off saving for the future, you are really inhibiting yourself from benefiting from that wonderful magic," says Kimberly Zimmerman Rand , an accredited financial counsellor and principal at Dragonfly Financial Solutions in Boston. "If you can start saving today ... you are going to have a lot more five years from now than if you decide to pay off debt for three years and start saving in year four."

The 12 Syrian entities delisted by UK 

Ministry of Interior
Ministry of Defence
General Intelligence Directorate
Air Force Intelligence Agency
Political Security Directorate
Syrian National Security Bureau
Military Intelligence Directorate
Army Supply Bureau
General Organisation of Radio and TV
Al Watan newspaper
Cham Press TV
Sama TV

Where can I submit a sample?

Volunteers can now submit DNA samples at a number of centres across Abu Dhabi. The programme is open to all ages.

Collection centres in Abu Dhabi include:

  • Abu Dhabi National Exhibition Centre (ADNEC)
  • Biogenix Labs in Masdar City
  • Al Towayya in Al Ain
  • NMC Royal Hospital in Khalifa City
  • Bareen International Hospital
  • NMC Specialty Hospital, Al Ain
  • NMC Royal Medical Centre - Abu Dhabi
  • NMC Royal Women’s Hospital.
Updated: January 03, 2023, 8:38 AM