How a Middle Eastern businessman became a world-famous criminal facing 291 years in American jail — Analysis

He’s the man accused of stealing hundreds of millions of dollars from the world’s most powerful elite through his Middle Eastern private equity company, the now-defunct Abraaj Group.

I scan the venue’s buzzing drawing room when my eyes land on a frail figure sitting in a quiet corner by a window. If it weren’t for his famously thick and swept back silver hair, I wouldn’t have recognized him. It’s been at least a few years since we’d last met. Naqvi’s casual attire – a navy blue sweater and jeans long enough to cover his ankle bracelet (courtesy of house arrest) – is a stark contrast to the sharp suits he sported every day, for nearly 40 years.

“Arif Naqvi is telling our entrepreneurs that they have an advantage that Silicon Valley doesn’t have… They know the region and the consumers!”RiseUp praised Naqvi at its 2017 Entrepreneur Summit “Abraaj Group is a beacon – savvy investors who want double digit returns like that should take note,”In the same year, an entrepreneur described the company to him.

“He told me, ‘I’m going to take a boy from you, and return him to you a man,’” Naqvi’s friend said as he recounted the day his son began a career with Abraaj. “He was a very generous guy on a personal level and with his staff,”One thing led to another. “He loved life.”

And how could Naqvi not love life when he was credited with turning Abraaj, which he set up in 2002, into one of the world’s top 20 private equity companies, and the leading investor in growth markets, managing a staggering $14 billion in assets across Africa, Asia, Latin America, Turkey and the Middle East, with investments in healthcare, clean energy, transportation, education and real estate. Bill Gates, Barack Obama and John Kerry are just a few of the figures Naqvi convinced to recognize the potential of emerging markets, which he called growth markets, with the purpose of doing good, while making money.

It’s hard to believe that just a few years later, in 2018, he would be known, instead, for the collapse of the Middle East’s largest private equity company and arrested on suspicion of defrauding US investors including the Bill & Melinda Gates Foundation. He is now being extradited to the USA, and will be tried on 16 charges of fraud and money laundering. These include misleading investors and auditors, temporarily borrowing money from two funds to create financial statements, changing financial statements in order to conceal a $200m shortfall, and borrowing $350M for Abraaj, a friend and shareholder, to make Abraaj appear solvent.

Naqvi doesn’t appear to be loving life as much these days. There’s a certain air of despair about him, and I notice that our chocolate croissant and sweet Danish remain untouched throughout our conversation.

According to bail terms, he is limited to two hours outdoor time per day. We leave Little House to head to Hyde Park to return to our Knightsbridge apartment. He suggested that we use a crosswalk at busy intersections to cut down on travel time. “Are you scared?”He asks. “No, let’s do it,”Yes, I do. And I get a glimpse of the mild acts of rebellion Naqvi is so famous for, like the time he was caught smoking in his school’s common room and got reprimanded for it. As we race to the opposite side of him, I see a slight smile and he seems almost childlike. It is possible that these seemingly small acts of rebellion give him some comfort or a sense of freedom. Perhaps it is that same defiant spirit that led him to investing in the region’s troubled markets, where few dared to venture.

In fact, I was in London to meet with the suspect accused of taking hundreds of millions. But I leave having met a man who’s had something of his own stolen: his life story.

Google the name Arif Naqvi and you’ll certainly find an endless stream of sensationalised headlines: “A financial fairytale: how one man fooled the global elite,” The Guardian; “He Convinced the Elite He Invested for Good. Then the Money Vanished,” Wall Street Journal; “How a Pakistani con man ‘robbed’ $100 million from Bill Gates,” New York Post.

Dig a little deeper and you’ll find they all have one thing in common: they would make for excellent Netflix productions. There’s even a book written by Wall Street Journal reporters Simon Clark and Will Louch, The Key ManThe claimant is an ex-Abraaj accountant “slept with a knife”he was lying on his back, while an IT executive was sitting next to him “checked for bombs”Below his car. “The two British men had to tread carefully and there were moments when they feared for their lives. Arif remained a powerful man,”The dramatized text states.

I was left wondering if it was their lives that they feared or their lifestyles. After all, Naqvi was known for paying his employees (both senior and junior) high salaries and generous bonuses, with the lowest paid associates at Abraaj Group pocketing $120,000 a year, according to HR firm Emolument.

It goes on to describe Abraaj’s work in the book. “more traumatic than being shot at or bombed,” though I can’t imagine it was too traumatizing for employees to receive that SMS from their banks notifying them of their latest bonuses making their way into their accounts. Even more so, given the lengthy tenures enjoyed by most directors, managing directors, and partners while employed at Abraaj.

There are certain aspects that the book draws parallels to life. These include the depiction of Naqvi’s downfall in Abraaj’s media. Nearly every character mentioned is depicted as a victim of Naqvi’s.

“Staffers were driven to tears by the pressure to drink,”The book claims that executives have renamed Abraaj “Hotel California”Following the Eagles lyrics: “You can check out anytime you like but you can never leave”. Other than employees, they could have quit, which many did, even though Clark and Louch claimed that staff were too bullied at Naqvi to leave. This feels like a story for movies, with 400 people bullying Abraaj.

Mustafa Abdel-Wadood, Abraaj’s former managing partner – who was arrested in New York and pleaded guilty to seven counts of an indictment against him, including extortion and securities fraud charges – wanted to leave the company, according to the book, but Naqvi allegedly pressured him to stay “through a strange combination of bullying and kindness”. Strange, indeed. Either Arif was able to make anyone do what he wanted, or employees were unable to control their impulses.

Abdel-Wadood, himself, is well-connected, his ex-boss Egyptian billionaire Naguib sawiris being one of his guarantors on his $10 million bail bond. Wall Street Journal.

Abdel-Wadood testified in court “My commitment to Abraaj compromised the integrity of my judgement, and I ended up drifting from who I really am.”

Who is Mustafa Abdel-Wadood, though? Was he Naqvi’s victim? He was his neighbour. Both lived in Dubai’s Emirates Hills gated community. According to a former Abraaj employee, when Abdel-Wadood wasn’t hosting parties for hundreds of people at his massive villa, he was inviting friends on a 90ft yacht called Caramel. Yet, his lawyer claimed in court. “This is a tragic story of a good man who stayed at Abraaj to try to rectify the madness that Arif Naqvi created and along the way participated in the wrongful conduct that he has acknowledged today”.

Abdel-Wadood could receive 125 year sentence for his time spent in prison with El Chapo. However, fate seems to have been kind to Abdel-Wadood as he cooperates US authorities in exchange for helping build the case against Naqvi.

But what exactly was Abdel-Wadood’s role in Abraaj? We learn from his acquaintance: “All this act of, ‘Oh, I’m just a poor guy caught in the middle of this,’ is ridiculous. He demanded to appear on our cover and receive an award during one of our awards ceremonies. This was back in 2007, while I was still working as a publisher. I went to my boss and said, ‘Hang on a minute, why is this guy getting a cover and an award?’ and my boss said to me, ‘You don’t understand, this guy’s the main man at Abraaj. He just doesn’t get any credit. Arif gets all the credit’.”

Another person who knows the Egyptian’s told me, “you’d think a guy who was working with Naguib Sawiris would know exactly what he was doing at Abraaj.”

Another figure whose exact role in Naqvi’s role appears to be muddied is ex-Abraaj managing partner Sev Vettivetpillai, who faces nine counts of criminal activities and 115 years in jail – and who changed his non-guilty plea to a guilty one to get less jail time through a bargain with the US authorities against Naqvi – and allegedly “felt the sting of his conscience even as he conspired with Arif,”The book.

However, our source, a former acquaintance of Vettivetpillai’s, said the executive was “happy just being the bookkeeper, as long as he got to enjoy the rewards of the job”.

Naqvi is often referred to by the media as “the mastermind behind the aforementioned.” “global criminal conspiracy,” under his leadership, the investors – as well as the employees – enjoyed market beating returns.

Some of its success stories include a UAE water treatment company, an Omani insurer, a Qatari financial services company, and a Jordanian internet company – all of which sold on to generate a total of $81 million in profit, triple the amount Abraaj invested to buy them.

Even Fadi Ghandour’s logistics crown jewel Aramex doubled its sales under Abraaj’s ownership to $232 million, while profit quadrupled to $20 million in just four years. Abraaj received $86million in 2005 from Abraaj when it sold shares of the company to the Dubai stock market. This was five times more than the $15 million that it had originally invested. Aramex employee stock options owners shared the $14 million payment.

Abraaj paid investors a $600m dividend in 2006. Abraaj bought a quarter EFG Hermes shares for $505 million in 2006. The shares were then sold over a year for twice the $1.1 billion price. Abraaj’s other successful investments are shares in the construction company Arabtech as well as Turkish hospital chain Acibadem which Abraaj sold for $355m to Singaporean as well as Malaysian investors.

Moreover, Abraaj sold its shares in Integrated Diagnostics Holdings (IDH), which operated medical-testing clinics in Egypt, in an IPO on the London Stock Exchange in 2015, after it doubled the size of IDH’s network of clinics. Under Abraaj’s ownership, it not only survived the strains of the Arab Spring, it thrived in spite of them.

A banker told me that an anonymous investment banker preferred to keep his identity private for the purposes of this article. “Financial markets are war zones. They attack people when they lose money and forget the times they made money.”

“Abraaj made exits at enormous realised profits to its investors… even though Silicon Valley is built on overvaluations before realisations occur. Startups make money before making profits. Abraaj was on the verge of takeoff,”He stated.

The world might know the names of those who benefitted from Abraaj’s rise, but the media and authors must ask the following question: The Key ManThe question that was left unanswered is: Who benefited from Abraaj’s fall? Naqvi was not the one whose extradition from Abraaj to the USA has been postponed due to his having “intermittent thoughts of not wanting to be alive,”Court documents confirm that. Naqvi will be charged under the US law that prosecutes criminal gangs such as the mafia if he is extradited.

He faces a sentence of life imprisonment if he is found guilty.

It’s a harsher sentence than that of the UK and US’ most notorious criminals, such as disgraced English tech entrepreneur Mike Lynch, or American fraudster Bernie Madoff, who ran the largest Ponzi scheme in history, worth around $64.8 billion.

Naqvi’s bail was also bizarrely set at £15 million, the highest in the UK’s judicial history, whilst Lynch’s bail was set at £1 million. He made $800million from the sale of the company by inflating its price to $11billion.

Even the infamous Madoff “only” got sentenced to 150 years in prison compared to Naqvi’s potential 291 years, while Lynch’s sentence amounts to a lenient 20 years in comparison.

So, what warrants Naqvi’s alleged crimes being punished twice as harsh as others? US defense attorney Michael Baldassare – who was hired by Naqvi’s lawyers to give his expert opinion – said Naqvi is unlikely to be granted bail in US courts, where federal judges “are a law unto themselves.”

There’s also the theory that, according to the same financial analyst who asked to remain anonymous, “US companies were looking to capture market share by buying Abraaj’s assets for cents on the dollar.”

Khalid Howladar (Managing Director and Founder of Acreditus Risk and Regulation Consulting Firm) made a pertinent prediction in 2019. He stated. “there are probably some attractive assets on the [Abraaj] balance sheet and a sale of one or more of these over 2019 is likely,”According to The National newspaper.

Some of the companies who bid for Abraaj include two of America’s most powerful and politically connected private equity firms, Thomas Barrack’s Colony Capital and Stephen Feinberg’s Cereberus Capital Management, which offered $125 million to buy Abraaj. Later, it canceled the offer along with Colony Capital and submitted lower bids. “By backing out at the last minute, they effectively opened the door to piecemeal sales which were also grabbed fund-by-fund by Western private equity firms,”I was told the same thing by the same financial analyst.

Even Obama’s former commerce secretary Penny Pritzker entered a bid to buy Abraaj through a group she said had “significant relationships at the highest levels of government and the private sector which, as you know, can be critical to unlocking opportunities for growth in emerging markets,”According to The Key Man book.

This begs the obvious question: Why would the ex-commerce secretary to the US president be interested a Middle East business like Abraaj. It is unlikely that Naqvi built something so important that the top executives of the US government were interested in it, even though the company was destroyed.

My sources tell me that all of the offers to purchase Abraaj failed. The liquidators decided to sell off parts of Abraaj and break it apart. According to The Key Man book, buying Abraaj’s operations could give the companies footholds in new markets across Africa, Asia and Latin America. It claims that their interest in buying Abraaj ironically confirmed Naqvi’s argument that growth markets (as he liked to call them), represented the future.

So, it was my last goodbye to the man who will spend his remaining days in an 8 x 6 foot prison cell. It is cold in London today. But, instead of taking the cab to get back to my hotel, I decide to walk. It has given me a greater appreciation of freedom.