ABRAAJ SCANDAL IN A NUTSHELL
Abraaj, which was founded in 2002, was the Middle East’s biggest private equity fund and one of the world’s most influential emerging-market investors, with stakes in health care, clean energy, lending and real estate across Africa, Asia, Latin America and Turkey.
Abraaj managed more than 40 private equity funds and assets of more than $14 billion until it crumbled in the biggest failure for a private equity firm. Problems began in February 2018 with allegations that money in Abraaj’s health fund had been misused. Arif Naqvi, founder and ex-CEO of Abraaj denied wrongdoing and blamed unforeseen political and regulatory hurdles for a delay in deploying the money.
After Abraaj defaulted on loans, Kuwait’s Public Institution for Social Security and a fund linked to Sharjah-based Crescent Group’s Hamid Jafar moved to force the company into a courtsupervised restructuring. Abraaj Investment Management Ltd., which managed the private equity funds, and its parent, Abraaj Holdings Ltd, filed for provisional liquidation in the Cayman Islands, where they are registered.
In the liquidation process several irregularities including mismanagement and misappropriation of funds were discovered.
Dubai’s financial regulator DFSA fined Abraaj $315 million for deceiving investors and misappropriating their funds.