Dubai, UAE— The Financial Markets Tribunal (FMT) has upheld the decision of Dubai Financial Services Authority (DFSA) to impose penalty against the founder of Abraaj, Arif Naqvi.
As a consequence, Naqvi will have to pay the record fine of $135.56 million (Dh497.86 million).
DFSA had held Naqvi responsible for a series of actions during his time as chief of Abraaj, including using investor funds as working capital requirements.
It is the biggest-ever penalty slapped by the DFSA against an individual.
Also read: Abraaj Group founder faces $135.5m DFSA penalty
The FMT also considered the $135 million “penalty is unusually high but the remuneration that Mr. Naqvi received was high amidst conduct that was exceptionally serious and the cause of what appears to have been unprecedented harm to the entire community of the DIFC.”
The FMT came into play after Naqvi referred the DFSA verdict to the Tribunal. Apart from the fine, Naqvi has been prohibited from any function in or from the DIFC.
It was December 12 last that the FMT issued its decision, which upheld the DFSA’s findings and rejected Naqvi’s FMT reference. The DFSA findings, set out August 2021, are thus final.
In July 2019, DFSA imposed $299.3 million fine on Abraaj Investment Management Ltd. (AIML), a Cayman Islands-registered firm not authorized by DFSA. The fine was based on misconduct in misleading/deceiving investors and carrying on unauthorized financial service activities in or from the DIFC.
In the decision notice, the DFSA found Naqvi was knowingly involved in misleading and deceiving investors over the misuse of their funds by AIML as ‘he personally proposed, orchestrated, authorized, and executed actions that directly or indirectly misled or deceived the investors’.