Top Abraaj executives arrested on US fraud charges

Arif Naqvi, Founder and Group Chief Executive of Abraaj Group has been arrested in London. (File photo/Reuters)
Updated 12 April 2019
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Top Abraaj executives arrested on US fraud charges

NEW YORK/LONDON: The chief executive and a managing partner of the collapsed Dubai private equity firm Abraaj Capital Ltd. have been arrested on US charges that they defrauded their investors, including the Bill & Melinda Gates Foundation.
Abraaj founder and Chief Executive Arif Naqvi was arrested in the United Kingdom last Friday, while managing partner Mustafa Abdel-Wadood was arrested at a New York hotel on Thursday, Assistant US Attorney Andrea Griswold said at a hearing in Manhattan federal court.
Griswold said prosecutors would seek to have Naqvi, who is charged with the same crimes, extradited. Casey Larsen, a spokesman for Naqvi, could not immediately be reached.
A statement from Naqvi’s external PR firm said Naqvi maintained his innocence in relation to the charges.
“Mr Naqvi maintains his innocence, and he fully expects to be cleared of any charges. For almost a year since the commencement of the provisional liquidations, he has been working tirelessly to maximize returns for Abraaj’s creditors,” the statement said.
Abdel-Wadood appeared at the Manhattan hearing and pleaded not guilty to securities fraud, wire fraud and conspiracy charges. His lawyer, Benjamin Brafman, did not immediately request bail, saying he needed more time to become familiar with the case.
Abraaj had been the largest buyout fund in the Middle East and North Africa until it collapsed in the middle of 2018 after the Gates Foundation and other investors raised concerns about the management of its $1 billion health care fund.
In brief indictments unsealed on Thursday, US federal prosecutors claimed that from about 2014 until Abraaj’s collapse, Naqvi and Abdel-Wadood lied about the performance of Abraaj’s funds, inflating their value by more than half a billion dollars.
The US prosecutors also said that Naqvi and Abdel-Wadood caused “at least hundreds of millions” of investor funds to be misappropriated, either to disguise liquidity shortfalls or for their personal benefit or that of their associates.
Griswold said that Abraaj had represented itself as a pioneer of “impact investing” that promoted social progress, for example by investing in hospitals in developing countries.
“In truth, Abraaj was engaged in a massive fraud,” she said.
The indictments were short on detail, Griswold said, because authorities moved quickly to arrest Abdel-Wadood upon learning he was in the United States with his wife and son to visit colleges.
She said prosecutors intended to file more detailed charges by the end of May.
After the hearing, Abdel-Wadood spoke briefly to his wife, who had watched from the courtroom gallery, before US marshals led him away in handcuffs.
Naqvi appeared in a court in London on Thursday and was remanded in custody to appear again on April 18 at Westminster Magistrates Court for the extradition case via video link, a court official told Reuters on Friday.
Abraaj and Naqvi face related civil charges filed on Thursday by the US Securities and Exchange Commission. Naqvi denies these charges. Liquidators of Abraaj could not be immediately reached for a comment.
The SEC alleges that Naqvi and his firm raised money for the Abraaj Growth Markets Health Fund, collecting more than $100 million over three years from US-based charitable organizations and other US investors.
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.


US-Saudi business council reports $13bn in contracts

Updated 24 May 2019
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US-Saudi business council reports $13bn in contracts

  • Improved oil prices, combined with a government focus on spending, contributed to the rise, the council said

LONDON: The value of joint Saudi-US contracts rose to $13 billion in the first quarter of 2019, according to a business council report.

That marked the highest value of awarded contracts since the first quarter of 2015, the US-Saudi Arabian Business Council said.

The value of contracts awarded during the first quarter amounted to about half of the total value in all of last year, it added.

The contracts “included many vital projects, notably in the oil, gas, water and transport sectors,” Abdallah Jum’ah, the co-chair of the council, was reported as saying by Asharq Al-Awsat.

Energy was the top sector, with $3.1 billion of the value of contracts awarded, with many struck by Saudi Aramco. 

Improved oil prices, combined with a government focus on spending, contributed to the rise, the council said.

The construction sector also looks set for a recovery after many projects were put on hold due to the oil-price crash.

“If the pace of awarding construction contracts witnessed during the first quarter of 2019 continues for the rest of the year, the index of awarding construction contracts may return to the range we witnessed before the canceling and postponing of mega projects due to lower oil revenue,” the council said.