How the Middle East's Top Investment Firm Unraveled: Timeline

(Bloomberg) -- It took Pakistani financier Arif Naqvi about 15 years to build Abraaj into one of the developing world’s most influential investors. It’s taken less than five months for the Dubai-based buyout firm to reach the brink of collapse.

Abraaj Holdings, which once managed almost $14 billion, has filed an application for a court-supervised restructuring in the Cayman Islands, according to a statement on Thursday. The firm said it made the move “so that the rights of all stakeholders can be protected,” while it works with joint provisional liquidators to “promote a consensual restructuring” of the company’s obligations.

Here we highlight the key events that brought Abraaj to the edge and sent shockwaves through the region’s nascent private-equity industry:

  • Feb. 2: Four investors including the Bill & Melinda Gates Foundation hire forensic accountants to examine what happened to some of their money in Abraaj’s healthcare fund, the Wall Street Journal reports
  • Feb. 4: Abraaj says it hired KPMG to verify all receipts and payments in the healthcare fund. The buyout firm says all capital drawn from the fund was for “approved investments”
    • Abraaj also says unused capital from its health fund was returned to investors
  • Feb. 8: Abraaj says the KPMG found no misuse of money
  • Feb. 25: Founder Arif Naqvi, 57, says he will cede control of the fund management business, but will remain CEO of Abraaj Holdings
  • March 7: Abraaj releases investors from commitments in a new fund that sought to raise between $5 billion and $8 billion
  • March 26: Abraaj is said to consider the sale of a stake in its fund management business to raise cash
    • Top executives leaving the company include CFO Ashish Dave and managing partner Sev Vettivetpillai
  • March 29: As pressure mounts, Abraaj is said to plan cutting about 15 percent of its total workforce of about 350 people
  • April 9: Abraaj hires Houlihan Lokey Inc. to help negotiations with investors
  • April 15: Abraaj hires Deloitte to examine its business, including its healthcare fund, after investors questioned an earlier review by KPMG, Reuters reports
    Read more: Dubai Firm Rattles Mideast Dealmaking With Alleged Misused Funds
  • May 7: Abraaj is in talks to sell a majority stake in its fund-management unit to U.S. asset manager Colony NorthStar Inc. to help stabilize the business
    • Abraaj is said to have told lenders that the sale of a stake in its fund-management unit and a Pakistani utility will help resolve potential liquidity issues
  • May 19: Two separate examinations into the alleged misuse of money at Abraaj are said to have found potential irregularities beyond the healthcare fund
    • An audit commissioned by four investors suggested that money from the health-care fund was being diverted elsewhere
    • Preliminary findings from a separate review by Deloitte at Abraaj’s request also throws up potential discrepancies in the accounting at some of the other pools
  • May 31: Colony NorthStar Inc. ends talks to buy a majority stake in Abraaj’s fund-management unit
  • June 5: Abraaj says it expects creditors to agree to a standstill on debt payments that will give it breathing space to meet its liabilities
  • June 7: In a key development, Kuwait’s Public Institution for Social Security says it’s seeking the liquidation of Abraaj Holdings as creditors step up pressure
    • The fund filed a petition in the Cayman Islands for the liquidation and winding up of Abraaj Holdings after it defaulted on a $100 million loan
  • June 11: Deloitte’s review finds that Abraaj commingled about $95 million when it faced cash shortages
  • June 12: Abraaj Holdings plans to file for provisional liquidation in the Cayman Islands before June 29 when a court hearing of a petition to liquidate the company by Kuwait’s Public Institution for Social Security is scheduled
    • The court-supervised provisional liquidation would allow Abraaj to restructure debt, negotiate with creditors and sell assets
    • Dubai Financial Services Authority said it’s "aware of various matters" involving Abraaj Group but isn’t in a "position to comment on firm specific matters"
  • June 14: Abraaj raises $52 million from the sale of its stake in Egypt’s Orascom Construction Ltd.
  • June 14: Abraaj says it plans to appoint Simon Conway of PwC Corporate Finance and Recovery, and Michael Jervis and Mo Farzadi of PricewaterhouseCoopers, as joint provisional liquidators.

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