Em­bat­tled in­vest­ment com­pany is con­sid­er­ing job cuts

Arab News - - BUSINESS -

DUBAI: The chief fi­nan­cial of­fi­cer of Dubai-based Abraaj Hold­ings told Reuters he had left the em­bat­tled pri­vate eq­uity com­pany.

Two other se­nior ex­ec­u­tives are also pre­par­ing to leave, three peo­ple with di­rect knowl­edge of the mat­ter said. The in­vest­ment firm, which man­ages $13.6 bil­lion in as­sets, is also con­sid­er­ing a round of job cuts, they said.

Abraaj has shaken up its man­age­ment, sus­pended new in­vest­ments and un­der­taken a review of its cor­po­rate struc­ture fol­low­ing a dis­pute with four of its in­vestors over the use of their money in a $1 bil­lion health care fund.

Abraaj has al­ways de­nied re­ports that it mis­used the money but the scan­dal at the Mid­dle East's largest pri­vate eq­uity firm is seen to have taken the shine off a fast-grow­ing sec­tor in the re­gion.

The in­vestors in­clude the Bill & Melinda Gates Foun­da­tion and the World Bank's IFC arm. Of­fi­cials at the Gates Foun­da­tion and IFC have de­clined to com­ment on the dis­pute.

Ashish Dave, Abraaj's CFO and part­ner, con­firmed that he had left the firm.

“I re­signed six months ago to spend time with my fam­ily and pur­sue other op­por­tu­ni­ties,” he told Reuters on Sun­day.

A new chief fi­nan­cial of­fi­cer, ap­pointed from within the com­pany, would be an­nounced soon, one of the sources said.

CEO Arif Naqvi, who founded the firm in 2002 and turned it into a ma­jor emerg­ing mar­ket in­vestor, stepped aside from run­ning the fund, Abraaj In­vest­ment Man­age­ment, in Fe­bru­ary. He will re­main chief ex­ec­u­tive of Abraaj Hold­ings, which was sep­a­rated from the fund as part of the changes.

The three sources said that Mustafa Ab­del-Wadood, manag­ing part­ner and global head of pri­vate eq­uity, and Ahmed Badreldin, head of MENA pri­vate eq­uity, in­formed Abraaj sev­eral months ago that they wanted to leave but were asked to stay on to help sup­port the com­pany dur­ing a dif­fi­cult pe­riod.

Badreldin told Reuters by phone that he had not re­signed from the com­pany.

An Abraaj spokes­woman said both Badreldin and Ab­delWadood were still in their po­si­tions at the firm.

“Ahmed (Badreldin) re­mains a part­ner and head of the MENA re­gion,” she said in a state­ment.

She also re­ferred Reuters to its state­ment on Feb. 23 that said Ab­del-Wadood con­tin­ues in his full-time role as a mem­ber of the Global In­vest­ment Com­mit­tee and as manag­ing part­ner of Abraaj In­vest­ment Man­age­ment.

A round of job cuts is also ex­pected at the firm, the sources said, but the newly ap­pointed cochief ex­ec­u­tives have yet to make a fi­nal de­ci­sion on the mat­ter.

The spokes­woman did not com­ment on the job cuts. The state­ment said that Abraaj had an­nounced a com­pre­hen­sive re­or­gan­i­sa­tion of its business and an in­de­pen­dent review of its struc­ture. The review is ex­pected to be com­pleted within a few weeks.

Abraaj said last month it had ap­pointed KPMG in Jan­uary to look into the fi­nances of the health care fund and within days it said the au­di­tor had com­pleted find­ings and ver­i­fied all pay­ments in line with agreed pro­ce­dures.

The four in­vestors had sep­a­rately hired foren­sic ac­coun­tants Ankura Con­sult­ing to in­ves­ti­gate how money was used in the Abraaj Health­care Fund, a source close to one of the firms told Reuters last month. Ankura did not re­spond to a Reuters re­quest for com­ment.

Last week, Abraaj told Reuters that the firm had be­gun free­ing large in­vestors from mil­lions of dol­lars in cap­i­tal com­mit­ments af­ter de­cid­ing to sus­pend its new fund.

In the last year, Abraaj has seen other high-pro­file de­par­tures due to fric­tion over the com­pany's rapid growth, two of the sources fa­mil­iar with the mat­ter told Reuters. They said the de­par­tures in­cluded Tom Speech­ley, a part­ner and for­mer head of the firm's North Amer­ica business, and Walid Bakr, a manag­ing direc­tor who fo­cused on Egypt.

They could not be reached for com­ment and the Abraaj spokes­woman de­clined to com­ment.

A foun­da­tion run by Bill and Melinda Gates is among the in­vestors in a con­tro­ver­sial Abraaj $1 bil­lion health care fund. (Reuters)

Newspapers in English

Newspapers from Saudi Arabia

© PressReader. All rights reserved.