Dubai regulator issues $135.5 million fine on Pakistani founder of Abraaj Group

Arif Naqvi, founder and Group CEO, Abraaj Capital, and Co-Chair of the Governors Meeting for Investors 2010 attends a session at the World Economic Forum (WEF) in Davos January 27, 2010. (REUTERS/FILE)
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Updated 27 January 2022

Dubai regulator issues $135.5 million fine on Pakistani founder of Abraaj Group

  • Dubai Financial Services Authority DFSA said Arif Naqvi was slapped with the financial penalty ‘for serious failings’
  • It also said it was fining former Abraaj senior manager and one-time Chief Operating Officer Waqar Siddique $1.15 million

DUBAI, United Arab Emirates: A regulatory body in Dubai said Thursday it is fining the Pakistani-born founder of Abraaj Group, the now defunct Mideast private-equity firm accused of fraud, a staggering penalty of $135.5 million.
The Dubai Financial Services Authority DFSA said CEO Arif Naqvi was slapped with the financial penalty “for serious failings.” The regulator also said it was fining former Abraaj senior manager and one-time Chief Operating Officer Waqar Siddique $1.15 million.
The DFSA said the fine reflects the seriousness of Naqvi’s alleged misdoings and is based on his earnings from the Abraaj Group.
Although the fine is only provisional, it is the latest twist in a saga that has spanned multiple continents and touched some of the world’s wealthiest people. Abraaj managed $14 billion for investors at its peak before its collapse in 2018.
Naqvi and Siddique dispute the regulator’s decision and have referred the notices to the Financial Markets Tribunal, where the parties will present their cases. The DFSA’s decisions are therefore provisional.
Two men attempted unsuccessfully through the tribunal to prevent the notices of fines from being published and to hold the tribunal hearings in private.
Naqvi has asserted his innocence as he fights extradition from the UK to the US, where prosecutors allege that Abraaj Group enticed American investors with the promise of socially responsible investments when instead it engaged in massive fraud. He’s also accused of taking hundreds of millions of dollars from Abraaj for personal gain.
Some of the US investors allegedly defrauded include the Bill & Melinda Gates Foundation and a US government agency that facilitates American business investments in hospitals in developing countries.
A former top executive at the Dubai-based firm told a US court in 2019 that he was wrong to be silent as Abraaj Group tried to recover from massive cash shortfalls by exaggerating its finances to win over new investors. After signing a cooperation deal with US prosecutors, Egyptian-born Mustafa Abdel-Wadood, who oversaw Abraaj investments as a managing partner, pleaded guilty to charges including racketeering conspiracy and securities and wire fraud.
Naqvi founded Abraaj Group in 2002, from which it grew to become the largest private-equity firm in any emerging market. He was the firm’s largest shareholder and its ultimate decision maker, according to the regulator.
The regulator alleges that Navqi used a Cayman Islands-registered firm to mislead investors, withheld sale proceeds from investors less likely to complain or challenge the firm, drafted misleading statements to investors to cover up misuse of their funds, and was involved in the cover-up of a $400 million shortfall by borrowing money to produce bank balances and statements.
Abraaj Group operated out of Dubai’s financial free zone known as Dubai International Finance Center. Known as the DIFC, it is the financial heart of Dubai characterized by sleek mirrored business towers, Michelin-star restaurants and luxury hotels for traveling executives.


Pakistan raises fuel prices after inconclusive IMF talks in Doha

Updated 23 sec ago

Pakistan raises fuel prices after inconclusive IMF talks in Doha

  • Finance minister Miftah Ismail says the government has increased petroleum prices by Rs30 per liter
  • Pakistan hopes to reach a staff level agreement with the IMF for the resumption of $6 billion loan facility

KARACHI: Pakistan’s finance minister Miftah Ismail announced on Thursday the government had decided to increase fuel prices by Rs30 per liter after his negotiations with the International Monetary Fund (IMF) for the resumption of a $6 billion loan package remained inconclusive due to subsidies on petroleum products.

The subsidies were part of a relief package provided by former prime minister Imran Khan in February amid rising inflation which he said was going to cost over $2 billion between April and June 2022. The IMF had objected over his decision while refusing to release the next loan installment of about $1 billion.

Pakistan desperately needs external financing to boost its falling foreign exchange reserves which, at the current level of $10 billion, can barely cover two months of import payments. The new government has been seeking the IMF support since assuming the political power of the country, though it remained reluctant to meet the stringent terms and conditions of the international lending agency.

“The government has decided to protect the poor and its details will soon be announced by the prime minister himself in an address to the nation,” Ismail told a news conference in Islamabad. “I have only come here to tell you that the government has decided that from Friday, 27th of May, the prices of petrol, diesel, kerosene oil and light diesel oil will be increased by Rs30 per liter.”

He said that the new price of petrol and diesel would be Rs179.86 and Rs174.15 per liter, respectively.

Ismail hoped the government’s decision would help stabilize markets.

“It will also stabilize the rupee and improve the situation at the stock market,” he continued. “Most importantly, it will bring back some balance within the economy.”

The finance minister maintained it was a difficult decision since increased fuel prices would to negatively impact the government’s political capital.

However, he added it was the right move for the country since it was important for everyone to know that the new administration was truly determined to fix Pakistan’s economic woes.

Responding to a question, he said he was optimistic that Pakistan would soon reach a staff level agreement with the IMF.

The finance minister discussed the possibility of increasing the size of the loan by another $2 billion for an extended period of one year during his meetings with IMF officials in Washington in April.

He later told journalists in the US that the resumption of IMF loan program would also help unlock more funding from multilateral donors.

In the absence of a breakthrough in recent talks with the international lending agency in Doha, however, Pakistan’s national currency hit another all-time low of Rs202.01 against the greenback on Thursday due to increasing demand for the US dollar for import payments.

Pakistani economists criticized the government for not taking tough decisions earlier in the day, saying its indecisiveness was further aggravating the economic crisis.

“With reserves continuing to slide and no signal from the government that it is willing to take tough measures, Pakistan faces a situation where things can very quickly spiral out of control,” Uzair Younus, who works with Pakistan Initiative at Washington-based Atlantic Council, told Arab News. “Once herd mentality kicks in, it will be even more painful to stabilize the economy.”


Four-time champions, Pakistan fail to qualify for Hockey World Cup 2023

Updated 26 May 2022

Four-time champions, Pakistan fail to qualify for Hockey World Cup 2023

  • Pakistan crashed out of Asia Cup after India’s convincing 16-0 win over Indonesia
  • The ongoing tournament in Jakarta serves as qualifier for next year’s World Cup

ISLAMABAD: Pakistan on Thursday failed to qualify for the Fédération Internationale de Hockey (FIH) World Cup 2023 after crashing out of the Asia Cup in the wake of India’s emphatic 16-0 victory over Indonesia, reported the state-run Associated Press of Pakistan (APP) news agency.

Once counted among the best hockey teams in the world, Pakistan have won the world cup four times in 1971, 1978, 1981 and 1994.

The last world cup was won by Belgium in 2018.

The green shirts crashed out of the next year’s hockey tournament after they failed to enter the super four stage of the Asia Cup currently played in Jakarta.

“Japan, South Korea, and Malaysia have sealed the FIH World Cup 2023 berths,” the APP said. “India qualify as hosts and Pakistan are out of the race.”

Losing 2-3 to Japan, Pakistan’s fate in the tournament was sealed after India decimated Indonesia to advance into the final four stage of the cup, pushing Pakistan out on goal difference.

Pakistan also failed to qualify for the FIH grand tournament next year since the Asia Cup served as its qualifier.

The green shirts began their Asia Cup bid with a 1-1 draw against India. They thumped Indonesia 13-0 in their next game before losing to Japan.


Inconclusive IMF talks plunge Pakistani currency to Rs202.01 against US dollar

Updated 26 May 2022

Inconclusive IMF talks plunge Pakistani currency to Rs202.01 against US dollar

  • Economists say the government’s inability to take tough decisions is further aggravating the economic crisis
  • Experts warn the situation can spiral out of control if reserves continue to slide in the absence of a viable strategy

KARACHI: Pakistan’s national currency on Thursday plunged to another all-time low of Rs202.01 against the US dollar after the government failed to convince the International Monetary Fund (IMF) in Doha, Qatar, to revive a loan program amounting to $6 billion.

The rupee further shed 0.04 percent of its value in the interbank market following the inconclusive talks under the IMF’s Extended Fund Facility (EFF) which the country secured in 2019 to shore up its fragile economy.

“The rupee remains under pressure in the interbank market against the dollar in the absence of major inflows and dwindling forex reserves since the dollar is in high demand for import payments,” Abdul Azeem, head of research at Spectrum Securities, told Arab News.

“The lack of progress in the IMF talks has further exacerbated pressure on the already weakening currency,” he continued.

Fuel subsides remained the main sticking point between the IMF and the Pakistani authorities during their weeklong negotiations, though the country’s finance minister Miftah Ismail still called the discussions “very useful and constructive.”

The subsidies in the oil and power sectors were announced by former prime minister Imran Khan earlier this year who said they would cost over $2 billion between April and June 2022.

“The IMF team emphasised the importance of rolling back fuel & power subsidies, which were given by the previous administration in contravention of its own agreement with the Fund. [The government] is committed to reviving the IMF program & put Pakistan back on a sustainable growth path,” the finance minister said in a Twitter post on Thursday after arriving in Pakistan from Qatar.

“We discussed targets for FY 23, where, in light of high inflation, declining forex reserves and a large current account deficit, we would need to have a tight monetary policy and consolidate our fiscal position,” he added. “Thus [the government] is committed to reducing the budget deficit in FY23.”

 

 

Pakistan desperately needs external financing to boost its falling foreign exchange reserves which, at the current level of $10 billion, can barely cover two months of import payments.

The country can immediately secure a release of around $1 billion from the IMF, if it complies with the Fund’s conditions and takes remedial measures like rolling back the subsidies on petroleum products and electricity.

“The crisis of decision making is fast becoming an economic crisis,” Uzair Younus, who works with Pakistan Initiative at Washington-based Atlantic Council, told Arab News.

“With reserves continuing to slide and no signal from the government that it is willing to take tough measures, Pakistan faces a situation where things can very quickly spiral out of control,” he said. “Once herd mentality kicks in, it will be even more painful to stabilize the economy.”

Pakistani economists said the country not only needed fresh inflow of US dollars but also plug financial leakages.

“The shortage of dollar is our main problem,” Dr. Ashfaque Hasan Khan, senior economist and former member of government’s Economic Advisory Council, told Arab News.

“We are earning dollar but there are lot of leakages as well,” he continued. “This means that our imports are too high. If you curb imports through policy measures, then your main problem will be resolved.”

Pakistan’s current account deficit reached $13.78 billion in the first ten months of the current fiscal year, compared with a deficit of $543 million in the same period last year. Higher imports are major contributors to the current account deficit.

The government has already banned imports of 38 items, including vehicles, mobile phones and other luxury goods, to cut the swelling import bill.

However, Khan described the move as a “half-hearted measure” which, he said, was only going to save about half a million dollars.

“We should have done an exercise and selected high value, fast moving, and non-essential items for banning,” he said.

Khan maintained all economic indicators were performing perfectly well apart from the balance of payment issue.

He noted that Pakistan had secured six percent real economic growth along with ten and four percent industrial and agricultural growth, respectively.


Pakistani PM dismisses Khan’s six-day deadline, says parliament will decide election schedule

Updated 26 May 2022

Pakistani PM dismisses Khan’s six-day deadline, says parliament will decide election schedule

  • Imran Khan called off his anti-government protest after addressing supporters and seeking dissolution of assemblies
  • The Supreme Court dismissed the government’s petition to hold contempt of court proceedings against the ousted PM

ISLAMABAD: Prime Minister Shehbaz Sharif said on Thursday the country’s parliament would decide the schedule for next general elections while extending an olive branch of dialogue to former premier Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party despite political differences with it.

The prime minister was addressing the National Assembly hours after Khan called off his anti-government protest in the federal capital while asking the government to dissolve the assemblies and announce fresh elections within six days.

Sharif said there was no room for “chaos and anarchy” in the country, adding that his administration was doing its best to revive Pakistan’s fragile economy.
“This house will decide when to hold elections,” he said while referring to Khan’s six-day deadline. “Your dictation will not work.”

The prime minister also emphasized the need for dialogue to sort out all outstanding political issues.

He said his coalition government would continue to address the challenges faced by the country and try to strengthen its economy.

Sharif criticized the PTI leaders for allowing their party workers to clash with law enforcement personnel while applauding the security forces for diligently performing their duties.

Earlier in the day, Pakistan’s top court dismissed the government’s petition seeking contempt of court proceedings against Khan for what it described as a violation of the court ruling.

The Supreme Court on Wednesday ordered the federal government and PTI to constitute negotiating committees and meet at 10pm to finalize modalities for peaceful and safe conduct of Khan’s long march to the capital.

However, the negotiations were not held as both sides claimed the other’s representatives did not show up.

The court had also ordered the government to designate a spot in H-9 sector where the protesters could rally. However, PTI workers and supporters converged at D-Chowk near the parliament building instead, and Khan held his rally at Jinnah Avenue.

A five-member bench of the apex court heard the government’s petition and dismissed it, saying it would give its reasons in a detailed verdict to be released later.

On Thursday morning, thousands of PTI supporters, who had gathered at D-Chowk after arriving from different parts of the country, dispersed peacefully following Khan’s address to them.

The speech followed a long political drama that included clashes between demonstrators and police, and arrests of hundreds of Khan’s supporters across the country.

“We are leaving for our homes now, but will come back again on Khan’s call to topple the government,” Hassan Shirazi, a demonstrator from Pakpattan city, told Arab News.

Shortly after the protest ended, the Islamabad district administration started removing shipping containers to unblock all roads in the federal capital and adjoining Rawalpindi city.

Police and other law enforcement personnel requisitioned from other provinces were also seen packing up and boarding buses to go back to their stations.

The administration also reopened Jinnah Avenue, which became the main protest venue, and all other roads in Islamabad, including Srinagar Highway and Islamabad Expressway.

Entry into the Red Zone, which houses important buildings like parliament and the Supreme Court, is however still restricted and only allowed from Margalla Road.


National Assembly amends election law to prevent overseas Pakistanis from voting

Updated 26 May 2022

National Assembly amends election law to prevent overseas Pakistanis from voting

  • Ex-PM Khan has called for fresh elections while the ruling coalition says it will first make electoral reforms
  • The amended election bill also plans to revoke use of electronic voting machines introduced by Khan’s administration

ISLAMABAD: The National Assembly of Pakistan on Thursday passed the Election Amendment Bill, 2022, to revoke the voting rights for overseas Pakistanis and prevent the use of electronic voting machines (EVMs) in general elections.

Pakistan’s ousted prime minister Imran Khan sanctioned the use of EVMs for the next polls in a joint parliamentary sitting in February, though the opposition factions, which are now in government, resisted the move and vowed to challenge it in the country’s top court.

Khan also wanted overseas Pakistanis to vote in future elections, saying that they made major contributions to the country’s economy by sending remittances. The former prime minister is also said to have a massive following among the Pakistani diaspora.

The election amendment bill, which was tabled by parliamentary affairs minister Murtaza Javed Abbasi, was passed with majority and sent to the Senate for approval.

“Overseas Pakistanis are precious asset of the country and the government does not believe in snatching their right to vote,” law minister Azam Nazeer Tarar was quoted by Radio Pakistan in the context of pilot testing of new forms of voting system.

Responding to the development, Pakistan's former information minister Chaudhry Fawad Hussain said on Twitter the parliamentary proceedings reflected the government's priorities.

"Overseas Pakistanis have been deprived of their right to vote," he wrote, adding the new government's agenda was "to bring back old Pakistan in its worst form."

Ex-PM Khan said earlier this year he wanted to make future elections more transparent by introducing technology, through his political rivals accused him of trying to manipulate voting process to his party’s advantage through EVMs that had never been tested in Pakistan.

Tarar noted the Election Commission of Pakistan (ECP) was also opposed to the introduction of EVMs since their potential of misuse and tampering was too high.

Khan, who was ousted from power in April after losing his parliamentary majority, has been seeking fresh elections in the country.

Pakistan’s new coalition government has said the government will only go to polls after introducing electoral reforms.