Dubai regulator DFSA hits ex-Abraaj finance chief with record $1.7m fine

The former finance chief of the now-defunct Abraaj Group said he was aware of the fraud that led to the private equity firm’s 2019 collapse but was too afraid to speak out, according to the Dubai financial regulator.

Ashish Dave was handed a $1.7m fine by the Dubai Financial Services Authority on Wednesday for his involvement in the scandal, the largest-ever penalty imposed on any individual in the emirate’s financial center.

Abraaj, which was headed by financier Arif Naqvi, went into liquidation following a process that began when investors including the Bill & Melinda Gates Foundation ordered a probe into the use of money from Abraaj’s healthcare fund.

Dave said he was “aware of the deception that was being carried out but was not in a position to stop it,” according to the regulator’s 96-page decision notice published alongside the fine. He feared he “would have been the only person, along with my family,” that would suffer as a result, it said.

The fine was imposed for Dave’s “involvement in deception, unauthorised activity, and compliance breaches,” according to the notice. His attempts to mislead investors contributed to the collapse of the region’s largest private equity firm and “undermined the confidence of investors in the DIFC and damaged the reputation and integrity of the DIFC,” it said.

Dave didn’t respond to calls to his mobile phone requesting comment on Wednesday.

The fine is the latest move by the Dubai Financial Services Authority over the Abraaj affair and the people behind a fraud that rattled reputations in the DIFC, the city’s financial freezone, one of the Middle East’s biggest business hubs. Abraaj at one time managed as much as $14bn.

According to Wednesday’s decision notice, Dave said he attended a meeting in mid-2017 with a senior official at the firm who told him $425m of investors’ money had been taken out of two funds without their knowledge. He said he immediately asked himself “What the hell have I gotten myself into?”

Dave was also banned from working in or from Dubai’s financial centre, the regulator said Wednesday.

Naqvi faces criminal charges in the US and is currently in the UK awaiting extradition. The Dubai regulator imposed a record $315m fine on Abraaj in 2019.

Dave worked at Abraaj as chief financial officer from September 2008 to September 2013 and then again from February 2017 to March 2018. Between 2013 and 2017 he was partner at accounting firm KPMG, which was also auditor of Abraaj.

Dave asked for a waiver of the fine, saying he was unable to pay it. The regulator rejected the appeal on the grounds that “it would send entirely the wrong signal to the market and to those who might be tempted to infringe the rules, the object of which is to protect investors.”