New York: A former executive of collapsed Dubai private equity firm Abraaj Capital Ltd on Friday pleaded guilty to US fraud and conspiracy charges, admitting that he lied to investors about the firm’s financial health and track record.
Former Abraaj Managing Partner Mustafa Abdul Wadood, 49, entered his plea before Magistrate Judge Gabriel Gorenstein in Manhattan. He has agreed to cooperate with US prosecutors in a criminal fraud case targeting five other former Abraaj executives.
In a prepared statement read in court, Abdul Wadood said he deceived investors at the direction of Abraaj founder Arif Naqvi, who is fighting extradition to the United States in London.
“I share responsibility for what happened,” Abdul Wadood said. “I regret my involvement more deeply than anyone can imagine.” “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,” Abdul Wadood’s lawyer, Paul Shechtman, said in a statement.
The office of the US Attorney in Manhattan, which is prosecuting the case, declined to comment.
Abdul Wadood was arrested in New York in April and released on bail, while Naqvi and another former managing partner were arrested in the UK. Three more former executives were charged earlier this month, but it was not clear whether they had been arrested.
Abraaj had been the largest buyout fund in the Middle East and North Africa until it collapsed in mid-2018 after investors, including the Bill & Melinda Gates Foundation, raised concerns about the management of its $1 billion (Dh3.67 billion) healthcare fund.
In an indictment, US prosecutors said that from about 2014 until Abraaj’s collapse, Abraaj executives lied about the performance of the firm’s funds, inflating their value by more than $500 million.
Prosecutors have said “at least hundreds of millions” of investor funds were misappropriated, either to disguise liquidity shortfalls or for the personal benefit of executives.