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The magnitude and severity of the fine will serve as a reminder and deterrent to others who might have similar ideas.
"Whatever you do, do it right," said Walter Disney. And nobody does it better than Dubai. I'm talking about the 1.15 billion dirham punitive punitive punitive penalties that the Dubai financial regulator imposed on two Abraaj group companies for "deceiving investors and the regulator". Sanctions imposed on Abraaj Investment Management Limited (AIML) and Abraaj Capital Limited (ACLD) come just over a year after the Dubai-based global private equity firm was liquidated for being mismanaged.
Having opened its investigations in January 2018, it took about a year and a half for the Dubai Financial Services Authority (DFSA) to carry out complex investigations covering several countries. "The size of these fines reflects the seriousness with which the DFSA considers the AIML and ACLD contraventions," said Bryan Stirewalt, DFSA CEO. "The DFSA has taken this step to penalize ACLD and AIML, dissuade others and protect investors," the regulator said in a statement. However, some believe that the penalties are too severe for the company in difficulty and that it may not be able to pay them at all.
It's great, actually. Because the punitive penalty sends a strong and clear message that compliance is non-negotiable and that those who try to play the system will be severely treated. The magnitude and severity of the fine will serve as a reminder and deterrent to others who might have similar ideas. "We will prosecute the persons or entities who perpetrated this activity, including those that allowed this to happen through major corporate governance offenses, to the fullest extent of our authority," said the DFSA's CEO in the statement.
The DFSA's findings show how the company took its investors to the countryside while deploying shimmering tactics for global regulators. Among the main methods discovered by the DFSA are how the Abraaj Group's subsidiaries "borrowed money just before the closing date to produce temporary bank balances at a level expected by investors" and how they " changed the reporting period lack of disguise ". They hijacked investor demands for updated financial statements and lied about delays in the distribution of exit products, the DFSA found.
Founded in Dubai by Arif Naqvi with a starting capital of $ 3 million in 2002, the private equity firm Abraaj has quickly grown to become the darling of "impact investors" – those seeking social returns and environmental and not just financial. The Naqvi, very smooth and well connected, seems to have had contact with Midas – Abraaj's badets under management have peaked at $ 13.6 billion before the situation begins to worsen for the company that is collapsed. It's by the end of 2017 that part of the impact of investors began to worry about the fact that their investments are not immediately mobilized or in the vehicles desired by the company. 39, intermediary of the billion dollar health care fund of Abraaj. One thing led to another and Abraaj is now obsolete, and his senior officials – including Naqvi and his managing partner, Mustafa Abdel-Wadood – are released on bail.
Naqvi was the most important name of the area of private investment capital of the region, which suffered a considerable setback with the collapse of Abraaj. But with the sanctions imposed by the DFSA and the lessons that all others, including institutional investors, have borrowed from this unfortunate episode, it's time to move on, restore investor confidence and strive for perfection. Nobody does it better than Dubai.
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