How a Middle Eastern businessman became a world-famous criminal facing a 291-year American prison sentence-RT News

RT tells the story of Arif Naqvi, an entrepreneur accused of stealing from some of the most powerful powerful people on earth

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It’s a chilly day in London. I arrive at a members-only club in Mayfair. I’m about to have a meeting I’ve been waiting to make happen for nearly two years. It’s with Arif Naqvi.

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!” entrepreneurship summit RiseUp said of Naqvi in 2017. “Abraaj Group is a beacon – savvy investors who want double digit returns like that should take note,” an entrepreneur said of the company in the same year. READ MORE: World doesn’t share West’s negative views of Russia – poll

“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,” said 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. Today he faces extradition to the US, where he would stand trial for 16 counts of fraud and money laundering, including misleading investors and auditors by covering up a $400 million shortfall across two funds by temporarily borrowing money to produce financial statements; changing financial statements to avoid disclosing a $200 million shortfall; and borrowing $350 million for Abraaj from an individual Abraaj shareholder and friend to make the company appear solvent.RT

FILE PHOTO. Doha, Qatar/ © Getty Images / Holger Leue

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.

He is only allowed two hours of outdoor time a day, according to the terms of his bail, so we leave Little House and head back to his Knightsbridge apartment through Hyde Park. He suggests we take a shortcut by crossing at a busy junction. “Are you scared?” he asks. “No, let’s do it,” I say. 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. I catch a hint of a smile on his face as we run to the other side, and for a moment, he appears almost childlike. I wonder if those seemingly insignificant acts of rebellion are what bring him the slightest bit of comfort and feeling of freedom these days. Perhaps it is that same defiant spirit that led him to investing in the region’s troubled markets, where few dared to venture.

Indeed, I had traveled to London to meet the man accused of stealing hundreds of millions of dollars. 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 Man, which claims a former Abraaj accountant “slept with a knife” by his bed, while another IT executive “checked for bombs” under 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 book states.

It raised a few questions in my mind, like whether it was their lives the two men feared for, 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.

The book goes further to liken working for Abraaj as “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. This is even more surprising given the long tenures that the majority of directors, managing directors and partners had enjoyed whilst being employed at Abraaj.

However, there are aspects of the book that draw parallels to real life in the way that Naqvi has been portrayed in the media following the downfall of Abraaj. 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, with executives renaming Abraaj “Hotel California” after the Eagles song lyrics: “You can check out anytime you like but you can never leave”. Except employees could have left, and many did, despite Clark and Louch insinuating staff were too bullied by Naqvi to quit. With 400 employees to personally bully at Abraaj itself, this feels like storytelling for the movies.

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. It is either that Arif had some sort of supernatural ability to get anyone to do whatever he liked, or that employees had such little self-control.

Abdel-Wadood is himself a well-connected man, with his former boss Egyptian billionaire Naguib Sawiris having been one of the guarantors for his $10 million bail bond, according to the Wall Street Journal.

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

But who is Mustafa Abdel-Wadood? Was he Naqvi’s victim? He was certainly his neighbor. The two lived in the same luxurious gated community, Emirates Hills, in Dubai. 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. And yet, his attorney 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, who spent his first few nights in the same jail as the infamous former drug lord El Chapo, could be sentenced to 125 years. But fate appears to be kinder to him, as he cooperates with US authorities for a lighter sentence in return for helping to build a case against Naqvi.RT

FILE PHOTO. View of Qatar Petroleum (QP). © Getty Images / Nadine Rupp

But what exactly was Abdel-Wadood’s role in Abraaj? His acquaintance tells us: “All this act of, ‘Oh, I’m just a poor guy caught in the middle of this,’ is ridiculous. All the way going back to 2007, when I was working in publishing, he was demanding to be on the cover of our magazine and to get an award at one of our ceremonies. 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,” according to 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”.

While the media describes Naqvi as the mastermind behind a “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. In 2005 when Abraaj sold its shares in the company on the Dubai stock exchange, it received $86 million, over five times the $15 million it had invested. Hundreds of Aramex employees owning stock options shared a $14 million payout.

Abraaj also paid investors a $600 million dividend after buying a quarter of EFG Hermes in 2006 for $505 million and selling the shares over a year later for double the price of $1.1 billion. Other successful Abraaj investments include shares in construction company Arabtech, as well as Turkish hospital chain Acibadem, which Abraaj sold to Malaysian and Singaporean investors for a $355 million profit.

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.RT

FILE PHOTO. Jebel Ali Port, Dubai. © Getty Images / Thierry Dosogne

An investment banker who prefers to remain anonymous for the purpose of this article told me, “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 spend money before they make profit. Abraaj was on the verge of takeoff,” he said.

And while the world may know who benefited from the rise of Abraaj, the question the media and the authors of The Key Man failed to address is, who benefited from the fall of Abraaj? Certainly not Naqvi, whose extradition to the US has been adjourned by a judge due to concerns of his having “intermittent thoughts of not wanting to be alive,” according to court documents. If Naqvi is to be extradited to the US, he will be prosecuted under a US law created to prosecute criminal gangs like the mafia.

If found guilty, he faces what is effectively a life sentence; 291 years in a US federal prison.

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. The Englishman, who inflated the price of his company to $11 billion ahead of its sale to a US conglomerate, made $800 million from the deal.

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.”

A relevant prediction was voiced by Khalid Howladar, managing director and founder of risk and regulatory advisory firm Acreditus, in 2019. He said. “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.RT

FILE PHOTO. A cargo ship in Red Sea near Aqaba, Jordan. © Getty Images / Philippe Marion

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. It later canceled its offer, along with Colony Capital, and submitted new, 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,” the same financial analyst told me.

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.

It begs the question, why would the ex-commerce secretary of the former US president be interested in a Middle East company like Abraaj? Unless Naqvi had built something so valuable that executives at the highest levels of the US government had their eyes on, even after its collapse.

All of the bids to buy Abraaj as a firm fell through, so the liquidators ended up breaking it up and selling off pieces of it, and for cents on the dollar, my sources told me. 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.

And so, I bid goodbye to a man who may spend the rest of his days in a 6ft by 8ft prison cell. Today is a chilly day in London. However, I opt out of taking a cab back to my hotel and decide to walk instead. I have a new appreciation for freedom.

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