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Dubai-based Abraaj Group, founded by businessman Arif Naqvi, collapsed in Dubai two years after the money-abuse scandal it provoked for investors who left the entire Middle East region. East with virtually no transactions in the private equity market.
The collapse of the Abraaj group not only resulted in the collapse of the private equity firm Arif Naqvi, but also destroyed the entire market.
Since the start of the sudden and rapid disappearance of Abraj nearly two years ago, when investors, such as Bill Gates, began to suspect, GCC private equity firms have not Fundraising, despite their strong performance almost everywhere else. According to Bloomberg, the US data provider PitchBook, based in Seattle, and Preqin, based in London.
"The collapse of Abraj has eroded the confidence of its institutional investors in emerging private equity firms over the last 15 years," said Alex Jimissey, chairman of the board of directors of Greenstone Equity. Partners, a Dubai-based company. We do not see a lot of foreign institutional fund head penetration for fund managers residing in the Middle East. "
Unless such an exceptional situation results in a slowdown of the DIFC's supervisory authority in the face of irregularities which, in less than 10 months, led to the collapse of a company that managed an investment day for a year. total amount of $ 14 billion.
After all this, the DFSA fined Abraaj 315 million dollars last Tuesday, a move deemed too late by investors, because the Securities and Exchange Commission (SEC) founder, Arif Naqvi, and a number of officials of his close entourage, accused of extortion and fraud.
(Aref Naqvi, Getty)
Dubai pays for slow investigations
Due to delays in its procedures, the scandal "Abraaj Group" first damaged the reputation of Dubai, and more generally the United Arab Emirates, as well as its negative impact on the market. Investment in private equity firms.
The emirate authorities subjected the group to thorough investigations for months, leading to liquidation and high fines.
Following the development of the DFSA's investigation with Abraj since the beginning of the crisis, it reveals a slowness in dealing with such an important portfolio at a time when the emirate is experiencing a deep economic, economic and commercial stagnation, also affected by its involvement in regional wars. And his participation in an unjust political seat imposed on the State of Qatar.
Chronology of investigations
January 2018
Received a complaint from an anonymous source alleging that "Abraaj" had misused the funds of an investor.
March 2018
– "Authority" opens an investigation into Abraaj Capital Limited.
– "Authority" requires Abraaj Capital to submit a separate report by a third party to demonstrate solvency issues.
April 2018
Compliance Officer The Authority reports that the Abraaj Group has violated capital requirements for most of the past nine months.
May 2018
"Power" prevents Abraaj Capital from dealing with new customers.
June 2018
– In the first public statement, the Authority said to be "aware of the different cases" of Abraaj.
– Abraaj Investment Management Company Limited and Abraaj Holding temporarily liquidate their investments.
– A Cayman Islands court orders the appointment of a joint liquidator.
August 2018
DIFC courts place Abraaj Capital in provisional liquidation.
July 2019
The Dubai Financial Services Authority (DFSA) imposed a flat-rate fine on two group members, Abraaj Capital and Abraaj Investment Management.
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