Dubai tribunal upholds largest fine ever imposed on an individual by the DFSA

Dubai's Financial Markets Tribunal has upheld the DFSA's actions against Abraaj's founder, Arif Naqvi, including a $135m fine, confirmed in a statement today (3 January). 

As publicised in the Dubai Financial Services Authority's (DFSA) media release on 27 January 2022, the DFSA on the same day published its Decision Notice against Arif Naqvi, Abraaj's founder and former CEO, for his serious failings in respect of the Abraaj Group. 

Naqvi was fined $135,566,183 (AED 497,866,807) and also prohibited and restricted from performing any function in or from the Dubai International Financial Centre (DIFC). 

Naqvi referred the DFSA's findings in its Decision Notice for review by the Financial Markets Tribunal (FMT), an independent appeal tribunal. 

On 12 December 2022, the FMT issued its decision which upheld the DFSA's findings and rejected Mr Naqvi's FMT reference. Therefore, the DFSA's findings, as set out in its Decision Notice dated August 2021, are final.

In July 2019, the DFSA imposed a fine of USD 299,300,000 on Abraaj Investment Management Limited (AIML), a Cayman Islands-registered firm not authorised by the DFSA. The fine imposed on AIML was based on its misconduct of misleading or deceiving investors and carrying on unauthorised Financial Service activities in or from the DIFC.

In the Decision Notice against Naqvi, the DFSA found that Naqvi was knowingly involved in misleading and deceiving investors over the misuse of their funds by AIML as he personally proposed, orchestrated, authorised, and executed actions that directly or indirectly misled or deceived the investors.

Ian Johnston, chief executive of the DFSA, said: "Mr Naqvi was the face of the largest private equity firm in the region and the face of impact investing. He was in a position of trust and influence and investors relied on him to ensure that the Abraaj Group's affairs were managed effectively and responsibly. 

"While Mr Naqvi preached about transparency and responsibility, he did not apply those principles in practice.  The DFSA's action against him, which was upheld by the FMT, is important in recognising the nature, scale and seriousness of Mr Naqvi's misconduct which ultimately led to the collapse of the Abraaj Group."