Abu Dhabi's Eshraq Investments to take legal action over Goldilocks stake

Dubai: Eshraq Investments PJSC said its board has approved criminal and arbitration proceedings linked to its 2022 acquisition of shares in Goldilocks Investment Company Limited, after determining that some of the acquired shares were subject to undisclosed pledges.

In a filing to the Abu Dhabi Securities Exchange, Eshraq said it would initiate formal criminal proceedings against former board members who approved the transaction and failed to disclose the pledged shares during the company’s General Assembly held on April 28, 2022. The board also authorised arbitration proceedings against the selling parties involved in the same deal.

The resolutions were passed during a board meeting held by circulation on November 5, 2025, which also saw the acceptance of resignations by board members Jacques Elias Fakhouri and Maha Abdul Majeed Al Fahim, both effective October 31. The company said it will call a General Assembly once it secures approval from the Securities and Commodities Authority to brief shareholders on next steps.

Goldilocks acquisition, dispute

Eshraq completed its acquisition of Goldilocks Investment Company Limited in 2022, a move aimed at diversifying its portfolio and boosting profitability. Goldilocks, now 99% owned by Eshraq, fully exited its shareholding in GFH Financial Group by April 2022 and no longer holds any stake in the Bahrain-based financial institution.

Earlier this year, Eshraq’s board raised concerns over the management and valuation practices of the Goldilocks Fund, managed by Shuaa GMC, the ADGM-regulated arm of Dubai-listed Shuaa Capital. The two entities operate independently with separate boards.

Eshraq questioned changes to the fund’s valuation methods, which led to a Dh497 million ($135 million) reduction in the value of underlying assets in the fourth quarter of 2024. It reported a net loss of Dh679.4 million in 2024, compared with Dh545.1 million in 2023, attributing the decline largely to write-downs in Goldilocks-related assets.

The company has since commissioned legal and financial advisers to conduct a forensic review of the fund’s management and valuation practices. Eshraq’s legal counsel has also issued a letter to Shuaa GMC to accelerate the redemption of underlying investments and terminate the investment management agreement.

Corporate, shareholder developments

Eshraq’s board is chaired by Fahad Al Qassim, who also leads Salama Islamic Arab Insurance Company, in which the Goldilocks Fund holds a 14% stake. The company’s largest shareholder remains Abu Dhabi Financial Group (ADFG), which owns 18.38% of Eshraq following its 2019 merger with Shuaa Capital. Another major shareholder, Inventive Investment Holding Limited, has recently raised its stake to 10.3%.

Shuaa Capital, meanwhile, has undergone a year-long debt restructuring, issuing mandatory convertible bonds (MCBs), with Eshraq joining as one of three new investors. Relations between the two firms became strained earlier this year when Eshraq initially denied agreeing to subscribe to Shuaa’s MCBs, later confirming participation following Shuaa’s disclosure of a binding commitment.

Former Shuaa managing director Jassim AlSeddiqi, who played a central role in the Goldilocks acquisition, resigned as Eshraq’s chairman in October 2023 and later sold his stake.

Changes at the helm

In August 2025, Eshraq announced the resignation of CEO Mohamed Al Sayed Al Hashmi, effective August 29, after two years in the role. He was appointed advisor to the board to continue supporting the company’s strategic direction. Tanvir Muhammad Haque was named Acting CEO and Chief Strategy Officer, effective September 1, 2025.

The approval of legal proceedings marks a new phase in Eshraq’s effort to address legacy governance issues tied to the 2022 Goldilocks acquisition. The board said the measures are intended to ensure accountability, strengthen transparency, and safeguard shareholder interests as the company reviews its investment management arrangements.