On July 30, the Dubai Financial Services Authority imposed penalties of $299m and $15m on Abraaj Investment Management Limited (AIML) and Abraaj Capital Limited (ACLD), respectively. These are the largest fines by the regulator to date.
The DFSA, which regulates more than 500 companies registered at the Dubai International Financial Centre, and has been working with the U.S. Securities and Exchange Commission, said it started an investigation into the now-defunct private equity company in January last year, across multiple jurisdictions.
AIML, a Cayman Islands company now in provisional liquidation, which managed Abraaj funds, carried out “unauthorized financial services, including fund management within and from the DIFC” that “actively misled and deceived investors in Abraaj funds over an extended period," according to the regulator.
Chris Skipper, Partner, Winston & Strawn Middle East, commented: “DFSA’s decision to impose fines on entities that have violated the fundamental principles of financial integrity and compliance reinforces DFSA’s and the wider Dubai Government’s commitment to strengthen investor confidence by protecting their interests through a sound, transparent, and secure regulatory environment. This approach is clearly reflective of the maturing financial environment in Dubai and the UAE, positioning Dubai on par with other leading financial and investment hubs such as the Cayman Islands and Channel Islands. Protecting the interests of investors is of paramount importance to securing their confidence and attracting foreign direct investment (FDI) to Dubai. DFSA’s due diligence highlights that Dubai has zero tolerance to financial malpractice and that the Emirate is committed to upholding the highest standards of corporate governance and transparency - an essential step in Dubai’s evolution as a global financial destination.”