Wednesday 04, July 2018 by Kudakwashe

DFSA investigates Abraaj over alleged mismanagement


The financial regulator has interviewed the firm’s founder, Arif Naqvi, and other senior executives in the past few months as part of the probe.


The Dubai Financial Services Authority (DFSA) is probing allegations of mismanagement at private equity firm Abraaj, reported Reuters.

The ongoing investigation weighs more on Abraaj, which is trying to sell its investment management business to Colony Capital, following a dispute with some of its investors over the use of money in a $1 billion healthcare fund.

The embattled equity firm is on the verge of financial collapse after a scandal over its use of investor money.

Omar Lodhi and Selcuk Yorgancioglu, Abraaj co-CEOs were among those questioned by the regulator and no immediate response have been made from both Naqvi or his legal representative.

Abraaj’s problems erupted late last year, when investors including the Bill & Melinda Gates Foundation and the International Finance Corp alleged that Abraaj mishandled their money in the healthcare fund, allegations that Abraaj has denied.

The allegations triggered a solvency crisis at the fund, the biggest buyout fund in Middle East and North Africa.

The move resulted in Abraaj halting fundraising activities and shaking up management. Last month the firm filed for provisional liquidation in the Cayman Islands as it seeks an agreement with creditors and is selling parts of its businesses.

After an audit, Deloitte found that a cash shortage at the firm led it to dip into investor funds but there were no evidence of embezzlement or misappropriation.

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