Abraaj Liquidator Is Seeking Ways to Fund Payments to Employees
Abraaj Liquidator Is Seeking Ways to Fund Payments to Employees
(Bloomberg) -- Abraaj Group’s liquidator is seeking ways to make payments owed to staff at the buyout firm, while it has raised funds to cover immediate payroll costs amid the company’s restructuring.
Employees are concerned they won’t get a lump-sum payment due to workers under U.A.E. law instead of a pension, according to people familiar with the matter, who asked not to be identified because the information is private. About 90 employees such as back-office staff, secretaries and receptionists are owed money after working for the buyout firm, they said. The amount owed may total as much as $20 million, one of the people said.
PwC, which has been appointed as a provisional liquidator, has raised finance “principally in order to fund Abraaj payroll costs this week,” Mike Jervis, restructuring partner at the accounting firm, said in a statement. “We are in contact with the Deloitte team appointed to Abraaj Investment Management Ltd. to work out how other employee payments can be met.”
Separately, Abraaj may have unpaid bills to some advisory firms and for the rent on its Dubai International Financial Centre headquarters, some of the people said.
The collapse of Abraaj, once one of the developing world’s influential investors, comes just five months after it emerged that some of its investors commissioned an audit to investigate the alleged mismanagement of money in its health-care fund. Last week, Colony Capital Inc. agreed to buy some of Abraaj’s funds and oversee others as the holding company and investment management units of Abraaj undergo a court-supervised restructuring in the Cayman Islands.
Abraaj founder Arif Naqvi is facing a criminal case in the U.A.E. for issuing a check without sufficient funds. A complaint against Naqvi and another Abraaj director, Muhammed Rafique Lakhani, was filed in Sharjah over a bounced check, according to a court document seen by Bloomberg.
Checks were issued as a security on a loan of about $200 million to Abraaj and $100 million to Naqvi by the U.A.E.-based Jafar family, according to Habib Al Mulla, executive chairman of Baker McKenzie Habib Al Mulla, who is representing Naqvi. The U.A.E. treats bounced checks as a criminal offense. A hearing is scheduled for Thursday.
--With assistance from Archana Narayanan.
To contact the reporters on this story: Dinesh Nair in London at dnair5@bloomberg.net;Matthew Martin in Dubai at mmartin128@bloomberg.net;Tracy Alloway in Abu Dhabi at talloway@bloomberg.net
To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Chitra Somayaji
©2018 Bloomberg L.P.