Monday Dec 03, 2018
LONDON: Hopes of a solution have risen after the Abraaj group founder Arif Naqvi made last-ditch efforts to rescue the remaining business of his emerging markets empire and the Cayman Islands agreed to an extension for Abraaj’s joint provisional liquidators to devise a restructuring proposal over the next three months.
The Grand Court of the Cayman Islands has agreed to an extension for Abraaj’s joint provisional liquidators, led by PwC and Deloitte, to devise a restructuring proposal which will save Abraaj investors from years of lawsuits and advisor fees.
It has been learnt that Arif Naqvi, the Karachi born emerging markets business leader who has worked from Dubai for more than 25 years, met limited partners and creditors in an effort to win back their support for a plan to restructure the debt of Abraaj Holdings and some of its older funds to avert liquidation for the Dubai-based firm.
Arif Naqvi established Abraaj with only $60 million in 2002 and built it into one of the largest investors in emerging markets but the $13.6 billion company started facing issues after a row started over the use of money of investors by the group in a healthcare fund.
“Arif Naqvi has repeatedly stated his commitment to finding a positive, solution-led outcome to this situation. Doing right by the investors, creditors and staff is his priority, in addition to maximizing recoveries for all stakeholders involved,” said a spokesman of Arif Naqvi.
Arif Naqvi now lives in London after moving here from Dubai and manages his business dealings from his London headquarters.
Abraaj Holdings and Abraaj Investment Management filed for provisional liquidation in the Cayman Islands in June this year and since then several bidders have emerged for various Abraaj funds.
Until recently, Abraaj was $14 billion powerhouse, the largest private equity firm in the world, out of 3,500 private equity firms, attracting the likes of the Gates Foundation and World Bank.
“The fact that the court ruled in favour of an extension despite attempts to derail it means there is hope,” one Abraaj investor told the Forbes.
Arif Naqvi is known as a pioneer of emerging-market private equity and impact investing in countries from Africa to southeast Asia.
Abraaj has stressed that there has been no corruption or misappropriation of funds.
“There has been no misappropriation of funds,” Habib Al Mulla, executive chairman of Baker McKenzie and chairman of the Dubai International Arbitration Center’s Board of Trustees recently said.
In a major boost to the position taken by Arif Naqvi, Deloitte has said all that money taken from the funds was accounted for, adding that there was no evidence of embezzlement or misappropriation.
According to Deloitte, the money taken from their health fund and moved to Abraaj Treasury, which caused some investor panic, was also used to pay management expenses. They used the cash to meet expenses while ensuring that health funds also met their hurdle rate, Abraaj said according to a report in the Forbes.