DFSA stops Abraaj from taking on new work

Dubai - The latest developments came amid efforts by provisional liquidators of the buyout firm to sell its investment management business.

Dubai's financial services regulator has stopped Abraaj Capital, the embattled private equity firm, from taking on new business or moving money to Abraaj Investment Management (AIML), its related entity, as part of an investigation into the group.
"Given the onset of financial difficulties of the wider Abraaj Group, the DFSA has been closely monitoring the activities of its regulated entity ACL," Dubai Financial Services Authority said in a statement on Thursday.
The DFSA directive came as a Sharjah court is expected to issue a judgment on August 26 against the founder of the Dubai-based private equity firm Abraaj, Arif Naqvi, and another executive for issuing a cheque for Dh798 million without sufficient funds.
Also on Thursday, the Dubai International Financial Centre (DIFC) Courts appointed two individuals from Deloitte to oversee the winding up of Abraaj Capital.
The latest developments came amid efforts by provisional liquidators of the buyout firm to sell its investment management business.
Abraaj, which once managed nearly $14 billion, started to come under closer investor scrutiny when it was accused earlier this year by institutional investors including the Bill & Melinda Gates Foundation of mismanaging the healthcare fund aimed at investing in hospitals and clinics in parts of Asia and Africa.
The buyout firm's woes aggravated when a pension fund based in Kuwait said in a legal filing that Abraaj was unable to repay a $100 million loan and asked that the firm be liquidated. Auctus, another creditor, said the firm owes it around $300 million. Following these developments, Abraaj filed for provisional liquidation to get time for debt restructuring.
It is the first time that DFSA has said publicly it is investigating Abraaj, which faces allegations by some investors of misusing their money in a $1 billion healthcare fund.
Abraaj Holdings and Abraaj Investment Management filed for provisional liquidation in the Cayman Islands in June, while potential buyers are looking to buy parts of the Abraaj investment management business.
Apart from Colony Capital, a global real estate and investment management firm that has already agreed to buy some of scandal-tainted firm's key funds as part of a court-supervised restructuring process, others vying to run the healthcare fund include TPG Capital and Cerberus Capital Management, it is learnt.
issacjohn@khaleejtimes.com

• Dubai