When we restarted this blog in June 2018, the first few days were electric.
Saudi and UAE had signed a very wide ranging bilateral agreement thus almost demolishing the 6 nation GCC agreement.
And Abraaj had announced that it may file for liquidation due to approx. USD 1 billion in outstanding debt, an unknown amount in missing funds and commingling of funds on top of everything.
We had warned at that time in June 2018 itself that Abraaj folks will go to jail.
Dubai and Sharjah courts did their best and could not send Arif Naqvi to jail due to backroom maneuverings, his political connections and some settlements occurring behind the scenes plus the fact that the damage due to Abraaj fraud to Dubai is incalculable.
Some of the top most people came out publicly to say that Arif could not be arrested when he had already escaped from Dubai to London, UK.
But we held our ground patiently, until today.
Here is our comment from June 2018:
"So far no one has gone to jail but such complex frauds done by the very people at the top take months or years to come out, so expect people to leave Dubai quickly else many may end up behind bars!"
We were also perfectly accurate in our prediction that Abraaj cases will be fought everywhere BUT the DIFC courts.
This will hurt Dubai tremendously in the days and months ahead to attract any new and high profile business, thus, eroding the status of Dubai in the world of finance on the global stage considerably.
"What is most alarming and surprising that despite being a DIFC registered entity, DIFC has not made any serious comments except saying that they are monitoring the situation, thus leaving the battle to be fought in the courts of US, UK or Cayman etc further dwindling the case for any major financial corporation to have any base at all in the DIFC."
Today, news has just come out that both had indeed been arrested last week.
"In brief indictments unsealed on Thursday, prosecutors claimed that from about 2014 until the collapse, Naqvi and Abdel-Wadood lied about the performance of Abraaj’s funds, inflating their value by more than half a billion dollars."
12 Apr 2019: Top Abraaj executives arrested on U.S. fraud charges
"Naqvi inflated holdings, stole investor funds, U.S. claims
Firm’s failure was biggest private-equity insolvency ever"
"Naqvi is also charged with stealing investors’ money for himself and his inner circle, including Abdel-Wadood, a resident of Dubai. The two are accused of conspiracy, wire fraud and securities fraud."
"In court on Thursday, Griswold said the evidence against Abdel-Wadood included secretly recorded calls and meetings, encrypted messages and MILLIONS of documents and computer files.
Griswold said the U.S. had planted a geolocation tracker on Abdel-Wadood’s phone. Abdel-Wadood, dressed in a sports jacket, black shirt and jeans, didn’t speak during the proceeding."
If the US Govt is tracking you with stealth geo location trackers on your personal mobile, then, for sure, your days are numbered as a free man!
Arif and most Abraaj employees have left Dubai and resigned from Abraaj but the ghosts of their past misdeeds are definitely not behind them and they will end up being banned, or go to jail or be thrown out of their new jobs wherever in the world they maybe because the investigations are still ongoing in a dozen countries.
We had expected Dubai to arrest the Abraaj management, however, emerging markets by definition are collusive and corrupt, so it is not at all surprising that Dubai was unable to arrest any of the management.
Until day before, Apr 10, 2019, DFSA kept saying that Dubai has taken "appropriate action" even though they most likely knew that Arif and Mustafa had already been arrested last week.
9/11 payments went through Dubai, Iran transactions from multiple foreign exchanges, Noor Bank, ABN AMRO Bank, Dubai Bank etc went through Dubai, Espirito Santo bank collapsed in Dubai, MAS Clearsight ran away from Dubai, Deutsche Bank paid "fines", last week Standard Chartered Bank paid a USD 1.1 billion US fine for routing Iran transactions in 2015-2016 (once again for Dubai offences) from their Dubai offices and now Abraaj has looted global investors from DIFC etc, yet Dubai is looking into it and taking "appropriate" measures. LOL
Why have a regulator at all who has no clue what's going on in such a small city? LOL
If anyone thinks that they can cheat people like Bill Gates as well as various Govts around the world (like Kuwait, France, UK etc) and get away with it, then they are absolutely living in lala land and lack the most basic knowledge of the rules and regulations of the financial world.
America or any country in the world, will never allow a foreign corporate entity to cheat and do fraud on one of their richest and most famous persons.
Bill Gates was cheated and defrauded here. Even if he did not complain, US Govt has to take action on it's own accord, which is exactly what they have done in this case.
We have warned everyone that whatever the bankers, advisers & private equity "titans" (lol) have done in their careers in the past in order to rise or make excessive money by fraud or breaking any law, ALL will come out, every single thing, and all of such folks will be arrested.
Singapore, China, Vietnam, Switzerland etc and many more countries are busy putting so many bankers into jail that they will need to make a jail exclusively for financial people!
On an aside, bankers need to grasp the fact that they are facilitators of crimes worldwide because no financial crime can be done by a client if a banker is not involved. Although, in the case of Abraaj, bankers cheated their clients.
USA has been reluctant to send bankers to jail but even they have started to put top bankers behind bars.
17 Dec 2018: Former Wilmington Trust bank president sentenced to 6 years in federal prison for fraud
Mustafa had joined Abraaj in 2006 and became a star very quickly because it is very easy to rise if your fraud runs into billions of dollars.
He was awarded the Top 250 "Global Youth Leader" award at the Davos World Economic Forum (where the crooks congregate) immediately in 2007.
18 Jan 2007: Mustafa Abdel-Wadood of Abraaj Capital named Young Global Leader by World Economic Forum
For Mustafa, he went from World Economic forum in Davos, all the way into a jail cell.
For Arif Naqvi, he went all the way from being a top 50 UAE Expat and founder of the erstwhile largest Emerging Markets Private Equity company in the world into a jail cell.
And now Arif Naqvi and Mustafa Abdel-Wadood, both are in a jail cell, one in London and the other in NY.
Will both these guys be extradited to DXB jail? Also you say Singapore, CHina, Vietnam, Switzerland are putting bankers in jail. Do you mean their own corrupt bankers or do you mean they are extraditing anyone who travels there back to places such as the middle east where many of the financial crimes happen.
ReplyDeleteAlso if Abraaj was under investigation, with such tight security in the UAE how did the bankers escape in the first place?
Hello,
DeleteThank you for visiting and for your comment.
They will not be extradited to Dubai because Dubai doesn't want to admit they are fraudsters which they clearly are. And this case is way above Dubai level.
It's a global fraud involving dozens of countries but just a Dubai based company was used but private equity has many other companies in each country where they invest. This case is very very complex being private equity, funds and multiple top end investors.
Poor oversight, lack of corporate governance, poor enforcement, collusion etc is very rampant in Dubai.
The links are there for all those 4 countries, all bankers are local bankers, nothing to do with Dubai, thankfully.
Financial crimes are happening everywhere but Govt's don't want to prosecute. However, if a Govt changes and/or wishes to prosecute then they can probably arrest half the bankers in any country.
Anyone can escape from Dubai if they are smart enough to leave before a case is filed against them (which was the case for Abraaj) or if collusion/coverup is involved in which case they will allow you to leave and hide all information from media etc. But mostly, it is the first one, where people escape before criminal charges are filed against them. Second one is extremely rare.
Hope this helps clarify.
Thank you and best wishes.
Thank you for the clarification. You said "people escape before criminal charges are filed against them" Which I agree with from my experience, but in yesterdays article you said banks now have a 'button' to warn immigration the minute someone loses their job if they have debt. Those people that have the ' job loss button' pressed on them are not committing a crime until they missed a payment, so if they left within 24hours or less, how can they legally be stopped at the airport on their way out? I know UAE does not exactly stick to the law and makes things up as they go but you would think embassies would raise a larger issue with regards to detaining 'potential criminals' at the airport.
DeleteHello,
DeleteThanks for your comment for more clarity.
Actually, most job people do not run away. What we were hinting at is towards businessmen who have run away in tens of thousands.
An employee will run away under very peculiar circumstances only.
UAE expats are about 85-90% in poor category who receive less than 5k of pay. Their passports in almost all cases are not held by them. But some still manage to leave by saying that some family member is sick and need to go and they never return.
That leaves 10-15% other expats. Out of which less than 2-3% max are wealthy people who have resources, money power and contacts from where bulk of the people have run away leaving behind large debts.
Barely 10% approx are expats in middle class who earn anywhere from 5k to 100k a month. In this class, they will only run when they are aware that they will be fired and do not have the resources to pay back immediately or have some sudden emergency but are rare. You may have seen abandoned car videos from this class.
Most employees who run away are in the 5k or below salary class. They have taken loans for back home or credit cards etc, but they have their salaries deducted or reduced and when they get fed up with the system then simply walk away and leave.
The button being pressed is for this class who earn between 5k to 100k a month. Because the Media city companies and Carrefours and oil companies and everyone else now has an agreement to inform the bank which is when the button gets pressed if necessary.
The numbers are in thousands and all get deported so no one is allowed to speak up, media won't speak, banks won't publish and hence the stress in the system whether on banks or in jails has become of gargantuan levels.
And this stress MUST burst. And that day is very near.
Only people who can be stopped at the airport are those whose companies have informed the banks or who have not made payments in the last 1-3 months. Stoppage is for precautionary purposes only.
Infact over the last few months, for the first time, Dubai has decided not to hold passports any more for criminals or those undergoing proceedings because of the sheer volume and as you mentioned due to pressure from embassies, so now they can live freely with their passports INSIDE Dubai but they can't leave.
In UAE, it is no more that a crime needs to be committed, it is that the intent or circumstances are such that a crime may be committed like leaving behind a car loan or a 100k to 1m dirham loan, or the person is at risk of leaving because his/her visa and Emirates ID has been cancelled,, then they will act. And absolutely no one can stop the Govt.
Now they have become so fussy about Emirates ID and visa, that the next day of expiry of either, they suspend the bank accounts and mobiles etc. This never happened in so many decades ever.
You may ask the people who are in jails and you will know what all is going in.
Because so many have left UAE within 24 hours, hence they have made the system so efficient that any person with job loss AND a loan will be stopped. There could be a few who will still make it. But the risks are stacked against them.
We know a few people who have been stopped over the years so we speak from experience and not just hearsay.
Hope this helps clarify this very opaque, tense and scary situation.
Thank you and best wishes,
I agree with everything you said here. I know a few people recently who had a gotten word that they may be fired, and left because of debt. Or people that had an argument with a local manager and just left to avoid the risk as you are at the mercy of the system, now they fear being held up in a travel scenario because of an alert, even if the chances are thin...I also know one person who left and was held up on a layover in Dubai, eventually had to pay. Funny thing is he was living in Egypt for a few years and Egypt never deported him to the UAE. He still claims to this day it was a stolen passport that got him in this trouble. I have lived there a long time, I challenge anyone to take my passport and go get a loan, it is not so simple. You may remember this one.
Deletehttps://www.thestar.com/news/world/2016/03/17/american-teacher-has-been-detained-in-uae-over-faked-loans-taken-out-in-his-name.html
Hello and Good Morning,
DeleteThank you for your valuable comment.
Since 2015, it is our estimate that more than 10,000 businessmen have left UAE and the employees who have left are a guess but could be anywhere from 5,000 to 50,000.
The numbers simply astonishing which is why the banks and the Govt have become more efficient to curb the run aways and dozens of banks are collapsing (oops, merging).
Most banks are unable to file criminal cases for expatriation in any country abroad so only stupid people who return to UAE get caught but 99.99% will never come back or ever board an Emirates flight which is another factor causing depletion of traffic and losses for both Etihad and EK.
Have seen that article and as you said, and anyone with some knowledge of banking will attest that getting a loan is impossible even with passport like ID. In rare cases a banker may be involved who gets caught within weeks or months if an insider has helped do a fraud.
There are documents, there are multiple checks, there is bank account, there are phone calls, there are requirements for other ID's like employment or business records, sometimes even guarantees, pay slips are needed, now they get HR or senior management to verify employment since at least 5-7 years and visit the company premises with cameras (lol) etc. A company loan or personal loan is very difficult to get anywhere in the world but all above are now happening in Dubai in banking for checks.
Argument alone is insufficient to have a foreigner stopped unless the argument is enshrined in some law like abusing Islam or breaking some UAE law or even a fake case but must be lodged with the police. There are very rare exceptions at the top when a top Emirati may block but can not ever remember such a thing ever unless it's some employee of such an Emirati who has robbed him or cheated him etc.
Overall, situation is scary and they even found a bomb in Kuwait airport yesterday despite such heavy surveillance.
https://gulfbusiness.com/package-believed-explosives-found-kuwait-airport-report/
Thank you and best wishes,
Big fan and linked to your blog from our website today.
ReplyDeleteHello,
DeleteThank you for visiting and for your nice comment. Appreciate the follow and glad you enjoy the blog.
Is our blog mentioned on some corporate website of your company?
Do you mind sharing the link please?
Thank you and best wishes.
This comment has been removed by the author.
DeleteManoj do you know what the legal situation is for UAE residents who work in Qatar? We know of a man who has taken a CEO position in Qatar but also lives in Abu Dhabi - dual residency currently. He is in private equity so we reckon the Abraaj scandal burned him.
ReplyDeleteHello again,
DeleteWe would presume that most Abraaj employees, if they are smart, have left UAE. Don't know who is under investigation or not allowed to leave UAE.
Some senior ones left and went abroad immediately in Feb 2018 itself when the scandal first broke.
Whoever is in Qatar will not be able to travel firstly via a direct flight. Because all direct flights are suspended. So need to travel via Oman or Kuwait that can take like 6-7 hours for the entire flight time.
A Qatari residency visa per se is not an issue provided he is not a Qatari citizen.
Qatari residents may also find it difficult to enter UAE but that's very arbitrary depending on the nationality of the person and his religion. If he is coming to Abu Dhabi then obviously he is not of a "banned" religious sect or a banned nationality.
There is no ban on foreign nationals having both residencies because the ban can only apply to each of their country's citizens but not to foreign nationals who could have both residencies and thus be able to travel up and down.
He might have relocated because decent jobs are next to impossible in UAE and he might have had a nice opportunity because just like in 2008 there was an exodus from UAE to Qatar of good talent and same may be the case now because Qatar is much more stable than UAE.
What we can tell you is that another major scandal in Private Equity in Dubai is going to come out any week. Not to the scale of Abraaj but big enough. We are not at liberty to disclose the name of the company yet. We hear they have completely run out of cash.
Let's wait a few weeks and see what comes in the news.
Thank you and best wishes,
Thanks Manoj.
DeleteThe individual is a ruthless business man and we are seeing what can be done to seek recompense against him.
He holds an American passport, is Lebanese and his family live in Abu Dhabi.
Can we share some of your articles (syndicate them) on our blog?
Hello,
DeleteI am a bit confused about who is on which side with respect to your blog site and the details of your case.
Let us discuss this privately because it's a sensitive legal matter.
About any compensation or legal case, it would be best to take legal advice which am sure you have done, if not, then you must do, in order to protect your interests.
If you don't mind, please send me an email on the Contact Us page above on right top.
Americans are not under the ban category as far as Qatar visa is concerned. So technically, he can hold both visas of both countries.
About the blog, yes, you may share the blog on your site with a link to our blog.
Thank you and best wishes,
Thanks Manoj. I will email you.
ReplyDeleteBest wishes