Two Abu Dhabi firms, owner fined $144,000 for flouting licence rules
The two companies were fined $15,000 each, while the owner was fined $114,000
Abu Dhabi: Abu Dhabi authorities have imposed a $144,000 fine on two entities and their owner for flouting licence rules.
The penalty was imposed by the Registration Authority (RA) of Abu Dhabi Global Market (ADGM) against ADGM-registered companies HSQ Holdings Ltd and PL1 Holdings, as well as their ultimate beneficial owner and director Mohammed Wasim Nazir, for exceeding the scope of their Special Purpose Vehicle (SPV) licence, contravening ADGM’s companies regulations administered by the RA and providing false information.
HSQ and PL1 were registered by the RA in 2019 to carry out the business activities of an SPV, which is a passive entity and not an operational one. However, the RA found that both HSQ and PL1 exceeded the scope of their licence by acting as managers of two residential investment properties located in the UAE.
“In 2021, Nazir as the director of HSQ and PL1 filed applications to voluntarily strike the companies’ names off the RA’s register. Nazir as part of the applications knowingly provided false information to the RA, claiming that the companies did not have any liabilities or prospective liabilities even though there were ongoing claims and disputes with the investment properties’ apartment owners,” ADGM said in a statement.
“Further, the RA found that PL1 continued conducting business after submission of the voluntary strike-off application to the RA, which is a contravention of ADGM’s companies regulations administered by the RA. In 2022, the RA commenced an investigation into the conduct of Mr. Nazir, HSQ and PL1. As part of the investigation, the RA required Mr. Nazir to provide specified information and documents that the RA considered relevant to the investigation The RA found that Mr. Nazir concealed material information and documents in response to the RA requirement notices. Accordingly, the RA imposed the following financial penalties: $114,000 on Mr. Nazir, $15,000 on HSQ, and $15,000 on PL1.
Hamad Sayah Al Mazrouei, CEO of the Registration Authority at ADGM, said: “The fines imposed on Mr. Nazir demonstrate the RA’s intolerance to the misconduct of concealing relevant information and documents during lawful investigations. The RA expects complete transparency from registered directors, especially during the course of its investigations. ADGM-registered companies must also reflect the true scope of their commercial licence to prospective clients or investors to protect their interests and to ensure that the integrity of ADGM is protected.”