A £2 million bail request by the founder of defunct private equity giant Abraaj, Arif Naqvi, has been rejected by a London magistrate amid fears he could flee to Pakistan to gain protection from his powerful political connections in the country.
According to a report, Chief Magistrate Emma Arbuthnot said a potential 45 year sentence he would face if extradited and then found guilty on US fraud charges was a factor in rejecting the application, particularly as it was obvious he was well connected in his homeland. “I’m concerned to see he had the [Pakistan] president’s number on him,” Lady Arbuthnot said. “If he were to be granted bail, I’d be extremely concerned he would leave the country.”
Mr Naqvi was arrested earlier this month at London’s Heathrow airport on US conspiracy, wire fraud and securities fraud charges – accusations he denies. When he was detained the prosecution claimed one of the seven phone numbers he offered to authorities to notify he had been arrested was the current president of Pakistan.
Mr Naqvi is accused of defrauding investors of millions of dollars as part of his role as founder and CEO of the now insolvent Dubai-based private equity giant. The Pakistani citizen also allegedly directed a ploy to inflate the value of some of Abraaj’s funds in an attempt to cover up the firm’s liquidity issues while trying to attract a $6 billion investment for a new venture.
Officials say voice recordings and email correspondences form a core part of their investigation.
Prosecutor Rachel Kapila had revealed Mr Naqvi could face a maximum of 45 years in jail if found guilty.
“There is a strong concern he will flee to Pakistan,” she said, adding that prosecutors believed that he had access to a private jet that could be used to take him out of the country.
The British prosecutor added that the absence of a US extradition treaty with Pakistan made the temptation to flee all the more pressing and that if he did so, it would be “extremely difficult to get him back”.
“[Naqvi] is alleged to have played the leading role in a multi-million dollar scheme to defraud investors,” she said, setting out the allegations of a “significant, high value fraud” in detail.
Mr Naqvi’s lawyer Hugo Keith stressed that while Mr Naqvi had known of US investigations for some time, he had continued to reside in the UK. He said his client rejected the US allegations and would fight to prove his innocence.
“The idea he took money out for his personal benefit is ludicrous,” Keith said. “The personal benefit allegation is wrong.”
Mr Naqvi watched on in a suit from the dock over more than four hours of argument at Westminster Magistrates Court on Friday. It was argued there was a strong concern he would flee to Pakistan and not return. It was claimed Mr Naqvi, 59, he had extensive connections to the country’s elite, a hefty amount of wealth including property in the country, access to private jets and the ability to falsify documents.
His family reside at least two British properties in London and Oxfordshire. A number of relatives including his wife looked on from the public gallery. The businessman returned last night to custody where he could face a long spell in detention. If he fights the US extradition warrant the process could drag out for two years or more, according to proceedings in the American courts.
A number of Mr Naqvi’s associates were present as potential guarantors if the former Abraaj chief was granted bail. His barrister Hugo Keith QC said it was evidence of his good standing.
Mr Naqvi left the UAE after Abraaj hit trouble in 2018. The Abraaj collapse was one of the world’s biggest private-equity failures. Founded in 2002, it grew to become one of the world’s most influential emerging-market investors, with stakes in health care, clean energy, lending and real estate across Africa, Asia, Latin America and Turkey. Some of its notable investors included the Gates Foundation.
“The SEC alleges that Naqvi and his firm raised money for the Abraaj Growth Markets Health Fund, collecting more than $100m over three years from US-based charitable organisations and other US investors,” the US Securities and Exchange Commission recently said.
“According to the SEC’s complaint, Naqvi misappropriated money from the Health Fund and commingled the assets with corporate funds of Abraaj Investment Management Ltd and its parent company, and used it for purposes unrelated to the health fund.”
Earlier this week US officials announced the former managing partner of Abraaj Group, Mustafa Abdel-Wadood, would go on trial over the company’s collapse in November. He detained by US officials earlier this month in New York where he was planning to look at universities with his wife and child.
