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

Alaa Shahine

15 Jun 2018, 01:24 AM IST

(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
- Naqvi says move was part of planned restructuring, accelerated by reports of misused funds
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.

To contact the reporter on this story: Alaa Shahine in Dubai at asalha@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Shaji Mathew