Abraaj started it’s collapse in Feb 2018 and today, it has all come to an end in Dubai.
Like so many insolvent companies in the Middle East, Abraaj tried to run it’s operations from investor moneys meant for investments and paid the ultimate price.
They forgot it was a regulated firm and had the richest man in the world as it’s client, and was not a privately held firm where insolvency can be hidden for a longer period of time.
The company’s debt , according to some estimates and news reports is above USD 1 billion on a conservative basis.
Liquidator was appointed itself by the firm in Cayman Islands in June 2018.
Today, DIFC has appointed a provisional liquidator in Dubai as well. All new investments have been halted and all money movement between entities as well.
Abraaj will finally shut down in DIFC. About $14bn of investor money is stuck in various parts of the world.
The second case for a bounced cheque brought upon by Mr. Hamid Jafar against Mr. Arif Naqvi should see an international arrest warrant issued against Arif Naqvi before end of Aug 2018. The bounced cheque amount is only AED 798 million.
“There is a “high possibility” that the law firm will request the public prosecutor to issue an international arrest order for Mr Naqvi, who is currently outside the UAE, depending on the sentence issued, Mr Oghli said.
“If the judgment is imprisonment, then it’s not just a piece of paper, there’s a procedure to be followed; if he does not show up or appeal, then we will ask for an arrest order not only in the UAE but internationally,” Mr Oghli told The National. “No one is far from the hand of justice.”
All investors including Bill Gates and multiple Govts in Abraaj funds are stuck in Turkey, Kenya, Pakistan, Latin America etc. (via Cayman and Dubai) through bank lending worldwide, with losses mounting on a daily basis.
Abraaj had invested about USD 900m in Turkey alone across 11 investments because they were convinced (yawn, eyes rolling) of the Turkish markets.
In Turkey alone, Abraaj has lost about 50% of their investment value in the last 2 years due to the collapse of the Turkish currency.
31 July 2016: TRY 3.05
16 Aug 2018: TRY 5.81
Decline of 90.49%.
Investors will keep suing liquidators of Abraaj for years to come.
Besides the Interpol suspension, Air Arabia Board has also asked Arif Naqvi to resign.
Air Arabia is set lose a lot from their investment of USD 336 million with Abraaj.
Air Arabia is set lose a lot from their investment of USD 336 million with Abraaj.
This is what we had predicted in early June 2018:
Abraaj Capital of DIFC: How 16 years of success, collapsed in less than 5 months!
A lot of vulture private equity funds are looking to buy the assets of Abraaj.
Abraaj Capital of DIFC: How 16 years of success, collapsed in less than 5 months!
A lot of vulture private equity funds are looking to buy the assets of Abraaj.
The liquidators will have a tough task as will the buyers to value these assets while going through multiple court cases.
Many investments will perhaps shut down because of lack of funding, no management and court cases making it even more messy.
Many investments will perhaps shut down because of lack of funding, no management and court cases making it even more messy.
We have still not ventured into the realm of corruption and bribery that is so widely prevalent in all emerging markets.
But shhhh don't tell that to the buyers of these assets. ;)
Eventually, the assets may sell for pennies under distress due to multiple lawsuits and multiple jurisdictions and multiple depreciating currencies involved, a few years from now.
But shhhh don't tell that to the buyers of these assets. ;)
Eventually, the assets may sell for pennies under distress due to multiple lawsuits and multiple jurisdictions and multiple depreciating currencies involved, a few years from now.
Let us see how this unfolds.
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