The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) has imposed a financial penalty of $2,381,798, which includes a disgorgement amount of $1,881,798 and a fine of $500,000, Elia Investments Limited (Elia) and Babar Abbas.
Abbas is Elia’s sole shareholder and former director.
In the investigation conducted by ADGM’s FSRA, Elia was found guilty of carrying regulated activity of providing credit on an unauthorised basis, made false statements concerning its activities and also made false claims to be authorised to undertake financial services.
“Elia was at no time licensed or authorised by the FSRA to carry on any form of regulated activity in ADGM,” the authority said in an emailed statement on Tuesday.
The regulator further found that the sole shareholder and former director of Elia, Babar Abbas directed Elia’s conduct and provided false or misleading information to the FSRA in its investigations.
Adding on to this, the investigation found that Elia had conducted unauthorised regulated activities by entering into credit agreements with at least four victims.
“Elia did not provide the credit it purported to offer under each agreement and, in fact, did not have the capacity to provide the credit it purported offer. Instead, Elia solicited and obtained upfront payments from its victims under these arrangements, and then failed to return the majority of this money, causing financial harm to its victims,” the statement said.
The FSRA’s investigation also found that Abbas directed Elia’s conduct and used the money Elia had obtained, and not returned, for his own personal benefit.
Moreover, Abbas was found to have provided false and misleading information to the FSRA during the FSRA’s investigation, the statement said, adding that the FSRA has concluded that Abbas is not a fit and proper person to be involved in the industry and prohibited him indefinitely from performing functions in the ADGM.
“The conduct in this matter was particularly serious, in that the entity and individual engaged in unauthorised activities to obtain upfront payments of money from their victims, the majority of which they then failed to return,” FSRA chief executive officer Emmanuel Givanakis said.
Givanakis added: “In addition, Mr. Abbas was found to have provided false information to the FSRA when being interviewed during the course of the investigation. These are serious acts of misconduct and warrant the severe penalties imposed in this matter, as well as the prohibition imposed on Mr Abbas to perform functions in ADGM.”
Follow us on
