There may be more troubles for Abraaj Holdings despite its moves to restructure and avert a total bankruptcy.
The Dubai Financial Services Authority, DFSA said it has instructed Abraaj Investment Management Limited or AIML from providing “any unauthorised financial services activities in or from the DIFC”.
It would be recalled that Abraaj Holdings had filed for restructuring after it was sued for bankruptcy by some of its investors.
The DFSA said in a statement that:
On the 1st of August 2018, the DFSA received notice of a winding up petition filed by Abraaj Capital Limited (“ACL”) with the DIFC Courts pursuant to Article 50 of the DIFC Insolvency Law. The application also seeks to appoint two individuals from Deloitte LLP as joint provisional liquidators of ACL pursuant to Article 59 of the DIFC Insolvency Law. The application was made by ACL with the authority of Abraaj Investment Management Limited (“AIML”), as the sole shareholder of ACL.
On the 15th of August 2018, the DFSA received notice of an order issued by the DIFC Courts appointing the two proposed individuals as joint provisional liquidators to ACL.
ACL is an entity operating in the DIFC, licensed by the DFSA.
Given the onset of financial difficulties of the wider Abraaj Group, the DFSA has been closely monitoring the activities of its regulated entity ACL. The DFSA has taken regulatory actions over the past few months in order to safeguard the interests of investors and the DIFC. These include actions under the Regulatory Law to prevent AIML or any affiliates from removing funds from ACL and prohibiting ACL from dealing with new clients.
The DFSA has also instructed AIML to ensure it does not undertake any unauthorised financial services activities in or from the DIFC. AIML is not authorised to conduct financial services business in or from the DIFC.
Given such actions and the current matters surrounding the Abraaj Group, the DFSA continues to monitor the limited financial services activities currently being undertaken by ACL.
ACL is the only entity in the Abraaj Group regulated by the DFSA. ACL is authorised to conduct the following financial services: Managing Assets; Providing Fund Administration (but restricted to Funds established by the firm or members of its group); Advising on Financial Products; Arranging Deals in Investments; Arranging Credit and Advising on Credit.
ACL is part of the Abraaj Group of companies, and is a subsidiary of AIML and ultimately Abraaj Holdings Limited (“AH”). These two entities are both domiciled in the Cayman Islands. The DFSA will engage with the joint provisional liquidators for ACL, and in respect of the Cayman court appointed joint provisional liquidators for AH and AIML, the DFSA will work towards safeguarding investor interests within the remit of its jurisdiction.
DFSA has for some time been investigating a range of matters within Abraaj Group. However, in line with usual practice the DFSA will not comment on the matters under investigation.
The DFSA will continue to take all necessary actions within its remit to protect the interests of investors and the DIFC.