The Dubai Financial Service Authority imposed a fine against Arif Naqvi, founder and former CEO of Abraaj for failings in respect to Abraaj Group. Naqvi was fined AED497,866,807. This is the largest fine ever imposed by the DFSA.
Naqvi was also restricted from performing any function in or from Dubai International Centre (DIFC). He referred to the DFSA’s findings in its decision notice for review by the Financial Markets Tribunal (FMT).
The FMT, an independent appeal tribunal, then issued a decision in December which upheld the DFSA’s findings and rejected Naqvi’s FMT reference.
The DFSA findings as set out in August, are final.
In July, the DFSA imposed a fine of $299 million on Abraaj Investment Management Limited (AIML), a Cayman Islands registered firm not authorise by the DFSA. The fine imposed was based on grounds of misconduct, misleading/deceiving investors and performing unauthorised financial service activities in or from the DIFC.
Set out in the FMT’s decision, Mr. Naqvi “was centrally involved in a sustained course of unauthorised financial service activities and misleading and deceptive conduct by AIML”.
The FMT also considered that the $135 million “penalty is unusually high but the remuneration that Mr. Naqvi received was high amidst conduct that was exceptionally serious and the cause of what appears to have been unprecedented harm to the entire community of the DIFC.”
“Mr. Naqvi was the face of the largest private equity firm in the region and the face of impact investing. He was in a position of trust and influence and investors relied on him to ensure that the Abraaj Group’s affairs were managed effectively and responsibly. While Mr. Naqvi preached about transparency and responsibility, he did not apply those principles in practice. The DFSA’s action against him, which was upheld by the FMT, is important in recognising the nature, scale and seriousness of Mr. Naqvi’s misconduct which ultimately led to the collapse of the Abraaj Group,” said Ian Johnston, Chief Executive of the DFSA.
In November, as reported by Arabian Business, The Dubai Financial Services Authority (DFSA) imposed fines of $1.5 million (AED5.5 million) on KPMG LLP and $500,000 (AED1.8 million) on Milind Navalkar a former KPMG LLP Audit Partner and DFSA registered Audit Principal, over Abraaj failings.
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