Abu Dhabi investment company fined $4.7m over false claims, 'indefinite' industry ban  

Abu Dhabi Global Market's Financial Services Regulatory Authority has fined an investment company a total of $4.76m and also placed a prohibition order on it's sole director for making false claims to be authorised to undertake financial services.

In a statement on 8 November, the FSRA imposed a financial penalty of $2.38m on Elia Investments Limited and its sole shareholder which included a disgorgement amount of $1.88m and a fine of $500,000.

The Abu Dhabi regulator found that Elia carried on the regulated activity of providing credit on an unauthorised basis, made false claims, to be authorised to undertake financial services, and published false or misleading statements concerning its activities.

It further found that the sole shareholder and former director of Elia, Babar Abbas directed Elia's conduct and provided false or misleading information to the FSRA in its investigations.

An FSRA investigation found that Elia had:

• over the period from around July 2019 to around June 2021, carried on, and purported to carry on, the regulated financial services
• activity of Providing Credit in ADGM on an unauthorised basis;
• published false statements concerning its activities; and
• made false claims to be authorised to undertake financial services.

Elia was at no time licensed or authorised by the FSRA to carry on any form of regulated activity in ADGM.

The investigation found that Elia had conducted unauthorised regulated activities by entering into credit agreements with at least four victims. Elia did not provide the credit it purported to offer under each agreement and, in fact, did not have the capacity to provide the credit it purported offer. 

Instead, Elia solicited and obtained upfront payments from its victims under these arrangements, and then failed to return the majority of this money, causing financial harm to its victims.

The FSRA's investigation also found that Abbas directed Elia's conduct and used the money Elia had obtained, and not returned, for his own personal benefit.

Further, Abbas was found to have provided false and misleading information to the FSRA during the FSRA's investigation.

In addition, the FSRA concluded that Abbas is not a fit and proper person to be involved in the industry and prohibited him indefinitely from performing functions in the ADGM.

Emmanuel Givanakis, chief executive officer of the FSRA said: "The FSRA will take the necessary and appropriate action against entities and individuals that are in breach of our regulations and rules, including those that engage in unlicensed activities in ADGM or who falsely purport to be licensed, and seek to mislead the public in this way.

"The conduct in this matter was particularly serious, in that the entity and individual engaged in unauthorised activities to obtain upfront payments of money from their victims, the majority of which they then failed to return.

"In addition, Mr. Abbas was found to have provided false information to the FSRA when being interviewed during the course of the investigation. These are serious acts of misconduct and warrant the severe penalties imposed in this matter, as well as the prohibition imposed on Mr Abbas to perform functions in ADGM."