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.


Saudi energy minister recommends driving down oil inventories, says supply plentiful

Updated 19 May 2019
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Saudi energy minister recommends driving down oil inventories, says supply plentiful

  • Oil supplies were sufficient and stockpiles were still rising despite massive output drops from Iran and Venezuela
  • Producer nations discussed how to stabilise a volatile oil market amid rising US-Iran tensions in the Gulf, which threaten to disrupt global supply

JEDDAH: Saudi Arabia’s Energy Minister Khalid Al-Falih said on Sunday he recommended “gently” driving oil inventories down at a time of plentiful global supplies and that OPEC would not make hasty decisions about output ahead of a June meeting.
“Overall, the market is in a delicate situation,” Falih told reporters before a ministerial panel meeting of top OPEC and non-OPEC oil producers, including Saudi Arabia and Russia.
While there is concern about supply disruptions, inventories are rising and the market should see a “comfortable supply situation in the weeks and months to come,” he said.
The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is de facto leader, would have more data at its next meeting in late June to help it reach the best decision on output, Falih said.
“It is critical that we don’t make hasty decisions – given the conflicting data, the complexity involved, and the evolving situation,” he said, describing the outlook as “quite foggy” due in part to a trade dispute between the United States and China.
“But I want to assure you that our group has always done the right thing in the interests of both consumers and producers; and we will continue to do so,” he added.
OPEC, Russia and other non-OPEC producers, an alliance known as OPEC+, agreed to reduce output by 1.2 million barrels per day (bpd) from Jan. 1 for six months, a deal designed to stop inventories building up and weakening prices.
Russian Energy Minister Alexander Novak told reporters that different options were available for the output deal, including a rise in production in the second half of the year.
The energy minister of the United Arab Emirates, Suhail Al-Mazrouei, said oil producers were capable of filling any gap in the oil market and that relaxing supply cuts was not “the right decision.”
Mazrouei said the UAE did not want to see a rise in inventories that could lead to a price collapse and that OPEC would act wisely to maintain sustainable market balance.
“As UAE we see that the job is not done yet, there is still a period of time to look at the supply and demand and we don’t see any need to alter the agreement in the meantime,” he said.
US crude inventories rose unexpectedly last week to their highest since September 2017, while gasoline stockpiles decreased more than forecast, data from the government’s Energy Information Administration showed on Wednesday.
DELICATE BALANCE
Saudi Arabia sees no need to boost production quickly now, with oil at around $70 a barrel, as it fears a price crash and a build-up in inventories, OPEC sources said, adding that Russia wants to increase supply after June.
The United States, not a member of OPEC+ but a close ally of Riyadh, wants the group to boost output to bring oil prices down.
Falih has to find a delicate balance between keeping the oil market well supplied and prices high enough for Riyadh’s budget needs, while pleasing Moscow to ensure Russia remains in the OPEC+ pact, and being responsive to the concerns of the United States and the rest of OPEC+, the sources said earlier.
Sunday’s meeting of the ministerial panel, known as the JMMC, comes amid concerns of a tight market. Iran’s oil exports are likely to drop further in May and shipments from Venezuela could fall again in coming weeks due to US sanctions.
Oil contamination also forced Russia to halt flows along the Druzhba pipeline — a key conduit for crude into Eastern Europe and Germany — in April. The suspension, as yet of unclear duration, left refiners scrambling to find supplies.
Russia’s Novak told reporters that oil supplies to Poland via the pipeline would start on Monday.
OPEC’s agreed share of the cuts is 800,000 bpd, but its actual reduction is far larger due to the production losses in Iran and Venezuela. Both are under US sanctions and exempt from the voluntary reductions under the OPEC-led deal.
REGIONAL TENSIONS
Oil prices edged lower on Friday due to demand fears amid a standoff in Sino-US trade talks, but both benchmarks ended the week higher on rising concerns over disruptions in Middle East shipments due to US-Iran political tensions.
Tensions between Saudi Arabia and Iran are running high after last week’s attacks on two Saudi oil tankers off the UAE coast and another on Saudi oil facilities inside the Kingdom.
Riyadh accused Tehran of ordering the drone strikes on oil pumping stations, for which Yemen’s Iran-aligned Houthi militia claimed responsibility. 
Saudi Arabia’s minister of state for foreign affairs said on Sunday that the Kingdom wants to avert war in the region but stands ready to respond with “all strength” following the attacks.
“Although it has not affected our supplies, such acts of terrorism are deplorable,” Falih said. “They threaten uninterrupted supplies of energy to the world and put a global economy that is already facing headwinds at further risk.”
The attacks come as the United States and Iran spar over Washington’s tightening of sanctions aimed at cutting Iranian oil exports to zero, and an increased US military presence in the Gulf over perceived Iranian threats to US interests.