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Former top Abraaj Group executives arrested on charges of fraud

They are facing charges in the US

SAMAA | - Posted: Apr 12, 2019 | Last Updated: 2 years ago
SAMAA |
Posted: Apr 12, 2019 | Last Updated: 2 years ago
Former top Abraaj Group executives arrested on charges of fraud

Photo: AFP

Two former executives of The Abraaj Group, including the founder, have been arrested on charges of defrauding investors.

One executive was arrested after arriving in New York with his wife and son to look at colleges, reported Bloomberg. The Abraaj Group collapsed last year in the world’s biggest private-equity insolvency.

Arif Naqvi, the Pakistani founder and ex-chief executive officer, was arrested Wednesday in the UK and is awaiting possible extradition to the US. Mustafa Abdel-Wadood, a former managing partner, was apprehended Thursday in New York.

“The government moved forward because this defendant was present in the US this week unexpectedly,” Assistant US Attorney Andrea Griswold said in a hearing in Manhattan. Abdel-Wadood pleaded not guilty and is due back in court on April 18.

Abraaj, which managed almost $14 billion, was forced into liquidation in June after a group of investors, including the Bill & Melinda Gates Foundation, commissioned an audit to investigate the alleged mismanagement of money in its health-care fund.

Related: Pakistani founder of Dubai firm Abraaj faces jail term over bounced cheques

Naqvi and Abdel-Wadood are charged with inflating the value of the Dubai-based firm’s holdings and stealing hundreds of millions of dollars. Prosecutors say that from 2014 to 2018 they and others worked to artificially inflate the value of Abraaj’s emerging-market investments by more than $500 million. The firm used money earmarked for investments to meet its own operating expenses without telling investors, prosecutors said.

Naqvi is also charged with stealing investors’ money for himself and his inner circle, including Abdel-Wadood. The two are accused of conspiracy, wire fraud and securities fraud.

Naqvi was also charged in the United Arab Emirates in a $217 million bounced-check case, which was settled after the court sentenced him to three years in prison. Naqvi was out of the country at the time.

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