KHALEEJ TIMES, Wednesday, Jul 11, 2018 | Shawwal 27, 1439
UAE firms have up to $1b exposure to Abraaj Group
UAE businesses and listed
companies have an exposure of up to $1 billion to Abraaj Group, which is
struggling to regain investor trust in the wake of a criminal case filed against
its founder Arif Naqvi in a Sharjah court last month.
Sources said some of the major
listed companies have big exposure to the struggling group which allegedly
misused investor money in a healthcare fund. The firm has denied the
According to the sources,
Commercial Bank of Dubai, Mashreq Bank, Societe Generale and Commercial Bank
International are among secured lenders who have a significant exposure to the
embattled group, while Kuwait Pension Funds and Actus Fund figure on the list of
"Commercial Bank of Dubai and
Mashreq Bank have up to $500 million combined exposure, which is one of the
largest after Air Arabia which disclosed $336 million worth of exposure to
Abraaj in June," the sources said.
When contacted, Commercial Bank
of Dubai declined to comment on the exposure while a Mashreq spokesperson was
not available to comment at the time of going to press.
On Tuesday, Abu Dhabi-listed
companies announced disclosures in line with the directive of the market
regulator Securities and Commodities Authorities to declare exposure to one of
the biggest buyout funds of the Middle East.
First Abu Dhabi Bank said it has
direct exposure to Abraaj through a fully secured three-year loan of $21.4
million, which is due to mature in April 2019. The Sharjah-based United Arab
Bank confirmed an exposure to two entities of Abraaj Group but didn't disclose
In a filing to Abu Dhabi
Securities Exchange, Al Buhaira National Insurance Company disclosed Dh8.4
million, Emirates Insurance acknowledged $2.45 million and Waha Capital
mentioned an indirect exposure through Aqua Consortium where Waha owns a 49 per
cent stake in the company while rest 51 per cent is held by Abraaj. Al
Qudra Holding also said it has an indirect exposure of Dh61.6 million.
Abu Dhabi Commercial Bank, RAK
Bank, RAK Properties, RAK Ceramics, Invest Bank and Julphar Gulf are some of the
notable names who have no exposure to Abraaj, according to filings to the Abu
Dhabi Securities Exchange.
Global equities strategist and
fund manager Matein Khalid said the criminal conviction of Abraaj's founder in
the UAE is both tragic and problematic.
"Why did a private equity firm
that earned two per cent on almost $14 billion in assets under management need
to borrow $1 billion or co-mingle investor funds without their knowledge or
consent," Khalid questioned.
He said the liquidation of a
global private equity firm is a rare event. "This one will be compounded by the
divergent interests of different types of creditors, and shareholders. Multiple
regulators and legal jurisdictions will make a resolution difficult," he said.
The Sharjah court will resume
hearing of case against Arif Naqvi and another executive for issuing a dud
cheque of Dh177.1 million to Hamid Jafar, another founding shareholder in the