Dubai: Abraaj founder Arif Naqvi fined Dh497.8 million by regulator

The Dubai Financial Services Authority (DFSA) on Thursday published decision notices for the action taking against Arif Masood Naqvi and Waqar Siddique for serious failings in respect of the Abraaj Group.

The regulator imposed a financial penalty of Dh497.86 million on Naqvi and Dh4.22 million on Siddique. The two are also prohibited and restricted from performing any function in or from the DIFC.

Naqvi and Siddique dispute the DFSA’s findings and have referred the decision notices to the Financial Markets Tribunal (FMT), where the parties will present their respective cases. The DFSA’s decisions are therefore provisional.

The FMT will determine what, if any, is the appropriate action for the DFSA to take and remit the matter to the DFSA with such directions as the FMT considers appropriate to give effect to its determination. The DFSA’s decisions may be confirmed, varied or overturned as a result of the FMT’s review.

Siddique and Naqvi both applied to the FMT for orders to prevent the DFSA from publishing the Decision Notices and to have the FMT hearings held in private.

In January 2022, the FMT determined that the DFSA could publish the Decision Notices and that the FMT hearings will be public. The FMT stayed the operation of the financial penalties until the conclusion of the FMT proceedings but the prohibition and restrictions on Naqvi and Siddique from performing any function in or from the DIFC remain in effect.

Naqvi had previously applied to the DIFC Courts in June 2021 for permission to commence judicial review of the DFSA’s decision to take action against him. That application also failed, so the DFSA proceeded to issue Mr Naqvi with the Decision Notice, which he then referred to the FMT.

Naqvi founded the Abraaj Group in 2002. The company grew to become the largest private equity firm in the region, with an estimated $14 billion assets under management.

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Naqvi was the largest shareholder, the CEO and Executive Vice Chairman of the Abraaj Group.

Naqvi was the face and personality of the Abraaj Group, building his profile and reputation around the world on the purported success of the Group’s impact investing strategy. He was by far the single most influential person within the Abraaj Group and the ultimate decision maker on material or disputed matters.

The Decision Notice stated that Naqvi was knowingly involved in misleading investors over the misuse of their funds by Abraaj Investment Limited (AIML), a Cayman Islands-registered firm not authorised by the DFSA. In particular, the DFSA found that Naqvi personally proposed, orchestrated, authorised, and executed actions that directly or indirectly misled and deceived the investors, said a press statement issued on Thursday.

-waheedabbas@khaleejtimes.com

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