UAE regulators ask corporates to declare exposure to Abraaj

Arif Naqvi, founder and group chief executive of Abraaj. (Reuters)
Updated 21 June 2018
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UAE regulators ask corporates to declare exposure to Abraaj

  • Air Arabia admits $336 million exposure to Abraaj funds.
  • Abraaj sells its Latam, Sub-Saharan Africa, North Africa and Turkey Funds to Colony Capital.

DUBAI: The United Arab Emirates’ top securities regulator has asked UAE-listed companies to declare their exposure to Dubai-based private equity firm Abraaj, which filed for provisional liquidation last week.
The Securities & Commodities Authority sent a letter earlier this week and companies had until Thursday to submit their responses, Obaid Al-Zaabi, chief executive of the regulator, told Reuters.
Air Arabia, a Dubai-listed low-cost carrier, said this week that it had a $336 million exposure to Abraaj, which is the Middle East’s biggest private equity firm. Shares in the airline plunged because of these links.
Al-Zaabi said some companies in the UAE had exposure to Abraaj, without naming them.
A court in the Cayman Islands, where Abraaj Holdings is registered, ordered this week that PwC be appointed as provisional liquidators of the company and Deloitte as liquidators of Abraaj Investment Management Ltd.
Abraaj said that the latest restructuring agreement has received in-principle regulatory approval and is expected to close upon approval from the Cayman Islands court and other customary consents.
On Thursday, the Dubai Financial Services Authority (DFSA), which is the regulator of the Dubai International Financial Center (DIFC), said it would discuss “various matters” with the liquidators and “will continue to work toward safeguarding the interests of investors.”
The DFSA is involved because Abraaj has an entity regulated in DIFC.
Abraaj Group agreed to sell its Latin America, Sub-Saharan Africa, North Africa and Turkey Funds management business to US investment management firm Colony Capital Inc, the companies said on Thursday.
The sale agreement comes after months of turmoil at Abraaj in the wake of its dispute with four of its investors, including the Bill & Melinda Gates Foundation and International Finance Corp. (IFC), over the use of their money in a $1 billion health care fund. The group has denied it misused the funds.
The sale is part of a provisional liquidation and restructuring as set out in a court order. Financial terms of the deal were not disclosed.
Colony Capital has also agreed to oversee, on an interim basis, other Abraaj group funds that are not being acquired so that the group and all its stakeholders have a “comprehensive global solution in place,” the companies said.
The other group funds include the $1 billion health care fund, and some legacy funds of the private equity group.
Sources told Reuters earlier that US buyout firm TPG was in talks with investors in Abraaj’s health care fund to take over management of the assets of the $1 billion fund.
The K-Electric asset, which is being sold in Pakistan and is owned by Abraaj Holdings, is also not part of the transaction.
Colony’s deal comes after other investors such as Cerberus Capital Management had also made offers for the Abraaj business before it filed for provisional liquidation in the Cayman Islands.
A unit of Abu Dhabi Financial Group earlier this week made a conditional offer to buy Abraaj’s management interest in all of its limited partnerships for $50 million, according to a document seen by Reuters.
Since Abraaj’s row with some investors became public early this year, it split its investment management business and holding company, while its founder Arif Naqvi stepped aside from the day-to-day running of its private equity fund unit and the firm halted its investment activities.
Tom Barrack, executive chairman of Colony Capital, said that he hoped that the transaction would enable the process of rebuilding on all sides and also bring an end to the speculation that has swirled around Abraaj over the past months.


Fingerprint cash points come to Gulf

Updated 5 min 44 sec ago
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Fingerprint cash points come to Gulf

  • Bahraini-based Ithmaar Bank pioneers new technology
  • Used by government agencies worldwide

LONDON: Customers at Bahrain-headquartered Ithmaar Bank will soon be able to use just their fingerprint and pin number to take money out of cash points, dispensing with the need to carry their bank cards with them.
The technological solution has been developed by a Bahraini fintech firm Eazy Financial Services, and is set to be the Gulf region’s first biometric payment system. It is due to be launched in phases from the first quarter of 2019.
“Payments stand out as the single largest driver for the biometrics market. We are driving biometric 
verification in the region, which is the future of the financial industry,” said the fintech’s CEO Khaled Al-Ahli.
“Going forward, biometrics for financial products and services are expected to represent one third of the total market for biometric solutions in 2020,” he said.
The technology is based on an Automated Fingerprint Identification System which stores and analyzes fingerprint data and is used by government agencies and security services around the world.
The project was backed by Tamkeen — a government agency tasked with supporting the private sector and provides funding to start-ups — as well as support from the Economic Development Board and the Central Bank of Bahrain. It is part of wider efforts by the Gulf country to strengthen its reputation as a regional hub for fintech innovation.
“Bahrain’s forward-thinking regulatory approach provides an attractive environment for fintech – particularly in areas such as Islamic finance and payments. We look forward to welcoming more home-grown initiatives such as this,” said Bahrain’s EDB chief executive, Khalid Al-Rumaihi.