Abraaj founder Naqvi out of time to appeal $135m fine
▶ Businessman is out of time to appeal against $135 million fine imposed for misconduct at now-defunct firm
Arif Naqvi has run out of time to appeal against a $135 million fine imposed for misconduct and serious failings at the now-defunct Abraaj Group, The National can reveal.
The disgraced Pakistaniborn businessman lives under curfew at his London home after posting a record £15 million ($19 million) bail while battling against extradition to the US, where he faces fraud and money laundering allegations.
The Dubai Financial Services Authority has also been pursuing Mr Naqvi, 63, and first fined him last year.
But he referred its findings for review by the Financial Markets Tribunal, which rejected his appeal in December that year.
He has been told by the Dubai International Financial Centre Courts that he can no longer appeal against the $135 million fine.
Judge Nassir Al Nasser has ordered Mr Naqvi to pay $135,632,809, plus interest at 9 per cent a year.
The financial services authority told The National that it “does not comment on any ongoing legal action but will generally seek to use all available means to recover fines that remain unpaid, while also taking into consideration the claims of any affected investors or clients”.
Mr Naqvi attended the London School of Economics, before working for companies including Arthur Andersen and American Express.
He moved to Dubai and founded Abraaj in 2002.
With interests in Africa, Asia, Latin America and the Middle East to manage, the company had $14 billion of assets under management at its peak.
But Abraaj began to unravel as costs increased and it spent more than it made.
Whistleblowers began to warn investors not to put their money into a $6 billion Abraaj fund.
Alarm bells started ringing at the Bill and Melinda Gates Foundation when an executive sought bank records and began to ask what happened to the money promised for hospitals as part of its $1 billion healthcare fund.
It later emerged that money was being moved from the fund and was used to pay for various costs elsewhere in Abraaj.
Once a larger-than-life tycoon who regularly rubbed shoulders with the world’s movers and shakers, Arif Naqvi is now compelled to keep a low profile.
The Pakistani-born businessman lives under curfew at his London home after posting a record £15 million ($19 million) bail while battling extradition to the US, where he is wanted on 16 counts of fraud and money laundering.
Mr Naqvi, the founder of the Dubai-based Abraaj Group private equity fund, was arrested at Heathrow Airport in April 2019, the moment he stepped off a plane from Pakistan.
He is now being pursued to recover funds lost during the collapse of his empire.
Dubai International Financial Centre Courts have told him time has run out to appeal against a $135 million fine imposed for misconduct and serious failings at the defunct Abraaj Group.
Mr Naqvi wears an electronic tag to prevent him from fleeing Britain, having being released on bail after six weeks in Wandsworth Prison, London.
“One minute, I was welcomed by the global elite, my opinion seemingly sought by so many world leaders; the next moment, here I am,” he said in a video. “My ankle bracelet is a constant reminder that I am facing extradition.”
His home is a well-appointed but discreet block of flats in an upmarket area of central London, where a three-bedroom property can be bought for just shy of $3 million.
It is a gilded cage for a man who once planned to change the world, but is now battling to avoid up to 291 years in prison.
While plush by the average Londoner’s standards, it is a far cry from his former lifestyle, which included hosting cricket matches on a private pitch at his £12.25 million mansion in Wootton Place, about 100km west of London.
One match featured Imran Khan, the former Pakistan captain and later prime minister.
The cricket matches were attended by hundreds of bankers, lawyers and investors.
The match featuring Khan reportedly doubled as a fundraiser for his Tehreek-e-Insaf political party.
Beside rural England, Mr Naqvi had homes in France and the Caribbean, bought with the wealth he made through Abraaj, once the biggest private equity fund in the Middle East and North Africa. With interests across Africa, Asia, Latin America and the Middle East, at its peak Abraaj had $14 billion of assets under management.
With Mr Naqvi proclaiming his mantra was “doing good”, his apparent desire to use his wealth to help developing countries led to him sharing a stage at the World Economic Forum in Davos with other philanthropists, such as Bill Gates, who invested $100 million in Abraaj.
Born in Karachi, Pakistan’s commercial centre, Mr Naqvi attended Karachi Grammar School and the London School of Economics, before working for companies including American Express.
After moving to Dubai, he founded Abraaj in 2002 in the hope of, in his own words, “harnessing western-style capitalism to help achieve stability, better health and prosperity”.
Mr Naqvi’s swashbuckling personality made him the poster boy for so-called impact investment, a brand of business that involves trying to make a profit while doing good.
He lived a life of luxury, flying in a Gulfstream jet and sailing on his yachts, all the time comparing himself to mythical adventurer Sinbad.
But Abraaj began to unravel as costs started to rise, while the firm was spending more than it was earning, weighed down by a bloated management team with a taste for the high life.
Whistleblowers came forward, warning investors to steer clear of a $6 billion Abraaj fund.
Alarm bells started ringing at the Bill and Melinda Gates Foundation when an executive sought bank records and began to ask what had happened to the money promised for hospitals as part of its $1 billion healthcare fund.
It later emerged money was being moved from the fund and used to pay for various costs elsewhere in Abraaj.
Abraaj was liquidated in 2018 with $385 million unaccounted for, after investors commissioned an audit to investigate alleged mismanagement.
Mr Naqvi is accused of concealing a liquidity crisis at his firm and siphoning off hundreds of millions of dollars for his family.
The Dubai Financial Services Authority has also been pursuing Mr Naqvi, and first fined him in 2022, but he referred its findings for review by the Financial Markets Tribunal, which rejected his appeal in December that year. The tribunal found Mr Naqvi “was centrally involved in a sustained course of unauthorised financial service activities and misleading and deceptive conduct by Abraaj Investment Management Limited”.
AIML was a Cayman Islands-registered firm not authorised by the DFSA, which in 2019 imposed a fine of more than $299 million on the group for conducting unauthorised activities and misusing investors’ money.
The DFSA has now secured a default judgment against Mr Naqvi in the Dubai courts.
He has been ordered to pay $135,632,809, plus interest at 9 per cent a year.
The DFSA told The National it “does not comment on any ongoing legal action but will generally seek to use all available means to recover fines that remain unpaid”.
In the meantime, Mr Naqvi faces trial in the US after a High Court judge refused him permission to bring a judicial review against the 2021 approval to extradite him.
During the hearing, his lawyer, Edward Fitzgerald, argued Mr Naqvi was likely to be held in a notorious New Jersey prison where he may have to share a cell with violent criminals.
Mr Naqvi suffers from severe depression and there was a “real risk” of suicide if he was extradited, Mr Fitzgerald said.
Six former Abraaj executives are facing charges of racketeering and fraud in the US.
One of them, Sev Vettivetpillai, pleaded guilty in 2021 to misappropriating clients’ money and misleading investors and potential investors about Abraaj’s track record.
Having exhausted so many legal avenues to avoid the clutches of the US authorities, Mr Naqvi remains adamant he has done nothing wrong.
“I am crystal clear in front of my maker that I have never committed any intentional act of criminality,” he said.
One minute, I was welcomed by the global elite, my opinion sought by world leaders; the next moment, here I am ARIF NAQVI
Founder, Abraaj Group