NEW YORK/LONDON: The chief executive and a managing partner of the collapsed Dubai private equity firm Abraaj Capital Ltd. have been arrested on US charges that they defrauded their investors, including the Bill & Melinda Gates Foundation.
Abraaj founder and Chief Executive Arif Naqvi was arrested in the United Kingdom last Friday, while managing partner Mustafa Abdel-Wadood was arrested at a New York hotel on Thursday, Assistant US Attorney Andrea Griswold said at a hearing in Manhattan federal court.
Griswold said prosecutors would seek to have Naqvi, who is charged with the same crimes, extradited. Casey Larsen, a spokesman for Naqvi, could not immediately be reached.
A statement from Naqvi’s external PR firm said Naqvi maintained his innocence in relation to the charges.
“Mr Naqvi maintains his innocence, and he fully expects to be cleared of any charges. For almost a year since the commencement of the provisional liquidations, he has been working tirelessly to maximize returns for Abraaj’s creditors,” the statement said.
Abdel-Wadood appeared at the Manhattan hearing and pleaded not guilty to securities fraud, wire fraud and conspiracy charges. His lawyer, Benjamin Brafman, did not immediately request bail, saying he needed more time to become familiar with the case.
Abraaj had been the largest buyout fund in the Middle East and North Africa until it collapsed in the middle of 2018 after the Gates Foundation and other investors raised concerns about the management of its $1 billion health care fund.
In brief indictments unsealed on Thursday, US federal prosecutors claimed that from about 2014 until Abraaj’s collapse, Naqvi and Abdel-Wadood lied about the performance of Abraaj’s funds, inflating their value by more than half a billion dollars.
The US prosecutors also said that Naqvi and Abdel-Wadood caused “at least hundreds of millions” of investor funds to be misappropriated, either to disguise liquidity shortfalls or for their personal benefit or that of their associates.
Griswold said that Abraaj had represented itself as a pioneer of “impact investing” that promoted social progress, for example by investing in hospitals in developing countries.
“In truth, Abraaj was engaged in a massive fraud,” she said.
The indictments were short on detail, Griswold said, because authorities moved quickly to arrest Abdel-Wadood upon learning he was in the United States with his wife and son to visit colleges.
She said prosecutors intended to file more detailed charges by the end of May.
After the hearing, Abdel-Wadood spoke briefly to his wife, who had watched from the courtroom gallery, before US marshals led him away in handcuffs.
Naqvi appeared in a court in London on Thursday and was remanded in custody to appear again on April 18 at Westminster Magistrates Court for the extradition case via video link, a court official told Reuters on Friday.
Abraaj and Naqvi face related civil charges filed on Thursday by the US Securities and Exchange Commission. Naqvi denies these charges. Liquidators of Abraaj could not be immediately reached for a comment.
The SEC alleges that Naqvi and his firm raised money for the Abraaj Growth Markets Health Fund, collecting more than $100 million over three years from US-based charitable organizations and other US investors.
According to the SEC’s complaint, Naqvi misappropriated money from the health fund and commingled the assets with corporate funds of Abraaj Investment Management Ltd. and its parent company, and used it for purposes unrelated to the health fund.
Top Abraaj executives arrested on US fraud charges
Top Abraaj executives arrested on US fraud charges
Closing Bell: Saudi main index climbs to 10,485
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Sunday, gaining 34.32 points, or 0.33 percent, to close at 10,484.59.
The total trading turnover of the benchmark index stood at SR2.59 billion ($690 million), with 168 listed stocks advancing and 87 declining.
The Kingdom’s parallel market Nomu also gained 100.37 points to close at 23,454.65.
The MSCI Tadawul Index advanced by 0.13 points to 1,377.44.
The best-performing stock on the main market was Nama Chemicals Co., whose share price increased by 9.98 percent to SR22.38.
The share price of Al Masar Al Shamil Education Co. rose by 9.15 percent to SR23.85.
Saudi Paper Manufacturing Co. also saw its stock price climb by 8.42 percent to SR57.95.
Conversely, the share price of Canadian Medical Center Co. dropped by 6.37 percent to SR6.03.
The stock price of Kingdom Holding Co. also declined by 3.16 percent to SR8.28.
In the parallel market, Alfakhera for Mens Tailoring Co. was the top performer, with its share price advancing by 16.40 percent to SR8.80.
On the announcements front, Theeb Rent a Car Co. said it had signed a long-term vehicle leasing services contract valued at SR110.4 million with Hungerstation Co.
Under the deal, Theeb will lease 2,000 vehicles to HungerStation for a period of four years starting from 2026, according to a Tadawul statement.
The statement added that the vehicles will be delivered in batches within the first six months from the contract start date, taking into consideration global logistical circumstances and procedures beyond the control of both the agents and the company.
The contract is expected to have a positive impact on the company’s financials from the first quarter of 2026.
The share price of Theeb Rent a Car Co. declined by 0.79 percent to SR37.80.
