Arif Naqvi, the founder of Dubai-based private equity firm Abraaj, has been arrested on charges of defrauding investors, along with managing partner Mustafa Abdel Wadood.
Naqvi was arrested in London while Abdel-Wadood was detained in New York. Both men have denied any wrongdoing and Naqvi is also fighting efforts to be extradited to the US.
According to US authorities, the two are responsible for misappropriating hundreds of millions of dollars from Abraaj funds for their own personal benefit and to cover undisclosed capital shortfalls, crimes that led Abraaj to provide investors with inflated valuations of their funds.
The indictment also alleges that Abraaj “promoted and sustained the fraud schemes through lies and omissions to financial regulators”.
It is the latest sorry chapter in the downfall of what was once the biggest buyout firm in the Middle East but is now undergoing provisional liquidation in the courts of the Cayman Islands.
Dubai’s financial regulator, the Dubai Financial Services Authority, has said that it is cooperating with the Securities and Exchange Commission and “other relevant local and overseas authorities on this matter”.
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