New arrest as Abraaj’s Arif Naqvi is remanded for another week in jail

Third senior executive in the company, Sev Vettivetpillai, is also held

Arif Naqvi, founder of The Abraaj Group, is awaiting possible extradition to the US. Bloomberg photo

British police have arrested a third executive on charges related to the collapse of the Abraaj Group, it has emerged, as the Dubai equity company's founder was remanded to custody for another week.

Sev Vettivetpillai, a former managing partner who left Abraaj last year to join the LGT Group, has been detained in London and faces extradition on a US warrant.

Former Abraaj chief executive Arif Naqvi appeared in a London court on Thursday on US charges of allegedly misappropriating $230 million (Dh844.8m) in fund money.

After his appearance before magistrates, Mr Vettivetpillai was placed on £1 million (Dh4.7m) bail until June 12 with proviso that he observes a nightly curfew at a private address.

He served as head of impact investing for Abraaj after the company acquired his former employer, London private equity outfit Aureos Capital.

Mr Vettivetpillai had been held on the same charge as Mr Naqvi and the former Abraaj managing partner Mustafa Abdel-Wadood, who is being detained in New York.

Last week, the private equity company founder was arrested at Heathrow Airport by British police on behalf of the American authorities.

His initial extradition hearing, in which he was planning to make a bail application, was delayed until April 26 at Mr Naqvi’s lawyers’ request.

Representing Mr Naqvi, Hugo Keith QC said he anticipated the court would impose a substantial surety if he was granted bail.

“We need to get our ducks in a row,” Mr Keith said.

Shortly before his appearance, a number of people flocked into the public gallery at Westminster Magistrates' Court to catch a glimpse of Mr Naqvi, 59.

The businessman was led into the dock by guards, where he remained for less than a minute before being led away from the well of the court.

Casually dressed and sporting a full beard, Mr Naqvi seemed relaxed, waving and smiling at supporters in the gallery.

A small group of people who apparently knew him responded with gestures.

The Pakistani national will remain in custody in Britain until his next hearing date on Friday.

The whereabouts of Mr Naqvi was not known before  his arrest in Britain where his family have at least two properties, in London and rural Oxfordshire.

He left the UAE after Abraaj’s liquidation in 2018 following a fallout with investors, including the Gates Foundation.

Investors had commissioned an audit to investigate alleged mismanagement of $1 billion in the group’s healthcare fund.

Mr Naqvi founded the private equity company, which includes Abraaj Investment Management and Abraaj Holdings, in 2002.

The company grew to become the largest buyout fund in the Mena region and at its peak managed more than $14bn in assets.

In the executives' indictments, US prosecutors said Mr Naqvi and Mr Abdel-Wadood lied about the value of the company’s holdings and stole hundreds of millions of dollars.

They said that from 2014 to 2018, the Abraaj executives artificially inflated the value of the company’s funds by more than $500m.

"The SEC alleges that Naqvi and his firm raised money for the Abraaj Growth Markets Health Fund, collecting more than $100m over three years from US-based charitable organisations and other US investors," the US Securities and Exchange Commission said.

"According to the SEC's complaint, Naqvi misappropriated money from the Health Fund and commingled the assets with corporate funds of Abraaj Investment Management Ltd and its parent company, and used it for purposes unrelated to the health fund."

A spokeswoman for the Southern District of New York prosecutors' office said a hearing for Mr Abdel-Wadood, scheduled for later on Thursday, had been delayed until April 23.

The pair are accused of stealing investor funds for themselves. Mr Naqvi and Mr Abdel-Wadood deny any wrongdoing.