The CEO of the Dubai Financial Services Authority (DFSA) has said that it will look at “possibly changing” corporate governance rules following the collapse of the Dubai-based private equity group Abraaj last year.
The DFSA is responsible for regulating companies with a presence within the Dubai International Financial Centre (DIFC), the emirate’s financial free zone. Stirewalt, who was appointed as CEO of the DFSA in September last year after an eight-year stint as managing director of its supervisory arm, reiterated comments made in the Authority’s recently-published business plan that its job as regulator was only to oversee the entity that was based within the DIFC.
The Abraaj Group was founded in 2002 by businessman Arif Naqvi and it grew to become one of the biggest private equity players in the emerging markets space, with over $13 billion of assets under management. However, reports emerged in the Wall Street Journal and the New York Times in February last year that some investors in a $1 billion healthcare fund had raised concerns about the firm’s handling of funds. A report by Deloitte in June last year subsequently stated that investors’ funds had been commingled after the firm faced cash shortages. On June 18, 2018, joint liquidators from PwC and Deloitte were appointed to Cayman Islands-registered Abraaj Holdings and Abraaj Investment Management Ltd, respectively.
Liquidators have been since working on asset sales and although news emerged in December that fund manager Actis was due to take over some emerging market funds, the Wall Street Journal reported on Friday that Deloitte was seeking legal protection from prosecution ahead of potential asset sales. Deloitte declined to comment when contacted by Zawya.