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Arif Naqvi hobnobbed with the lords of high finance at the World Economic Forum in Davos on an annual basis. When not sharing a stage with Bill Gates or Richard Branson, Naqvi was either busy entertaining Prince Charles or being entertained by Tina Turner who belted out her signature tunes in private spectacles of ridiculous ostentation. Naqvi also owned Abraaj Capital, a Private Equity firm with a monumental reputation in the Middle East. Abraaj’s investors included a phalanx of who’s who in the cosmos of capitalism – The Bill & Melinda Gates Foundation, World Bank, the Washington State Investment Board…the list being endless. However, in a reality that transcended even murkiness, Arif Naqvi while flashing a wide smile and even wider philanthropic propaganda of ending the world of hunger and poverty, was simultaneously siphoning away funds belonging to investors and earmarked for the hungry and the poor, to unmarked and opaque bank personal bank accounts in the Cayman Islands.
Arif Naqvi pillaged Abraaj capital of $780 million and at the time of this review lives in his sprawling mansion in South Kensington, London, while awaiting extradition to the United States. If extradited, the charges leveled against him are enough to put him behind bars for a period of 291 years. The flamboyant wizard of finance turned out to be an unscrupulous Pakistani swindler and an immoral con artist.
Simon Clark and Will Louch of The Wall Street Journal, who had a major role to play in busting the colossal fraud of Ali Naqvi, have probably written one of the business books of the year. A cross between a Robert Ludlum thriller and a Michael Lewis page turner, “The Key Man” is an astonishing revelation of insatiable greed, ingrained debauchery, and inchoate ambitions. The story of Arif Naqvi is the tell-tale sign of capitalism gone wrong. When people attired in bespoke suits, flying private jets, and living in suites that cost upwards of $5,000 a night assemble to chalk out a future for the damned and the deprived of the world, and not a single voice of the unfortunates living on less than $2 a day is present to add or rebut such vainglorious plans, the outcome is bound to be a combination of stink and rot.
Born in Karachi, Naqvi studied in the elitist Karachi Grammar School before heading to the London School of Economics for his higher education. Following stints at Arthur Andersen and American Express, Naqvi arrived at his final business destination, the glitzy, glamorous, and pulsating hub of Dubai. Starting a new Private Equity fund named Abraaj, Naqvi soon became the poster boy for capitalism in the Middle East following an audacious acquisition of the logistics giant, Aramex. The name Abraaj itself being a paean to hedonism – “Ab” meaning Now and “Raaj” meaning Rule, in both Urdu as well as in Hindi.
As Naqvi’s fame accelerated, he used the phenomenal gift of the gab to count as his associates, then secretary of state John Kerry and acclaimed Harvard academician, Josh Lerner. He even found himself a place on the board of Interpol. Irony could not have died any less than a billion deaths, for when not portraying himself as the boon bestowing hand to the oppressed, Naqvi was busy plundering the funds of his own investors. Walling off a section of the finance department, Naqvi along with a coterie of unflinching loyalists headed by his partner Mustafa Abdel-Wadood, brother-in-law, and head of operations, Waqar Siddique and Rafique Lakhani the treasurer began brazenly raiding investor funds and either spending the same on ostentatious acquisitions or channeling them to offshore accounts in the Cayman Islands. Termed “Abraajery” this department was out of bounds to all other Abraaj employees.
As Clark and Louch illustrate in jaw dropping fashion, Arif owned his own Gulfstream jet with a personalised tail number, M-ABRJ, a super yacht named Raasta (The Path) and splurged millions on real estate in London. How could a fraud of such monumental proportions go undetected? The authors provide several damning reasons. KPMG the auditor supposed to examine the books of Abraaj was suffering from a massive conflict of interest situation. A partner in KPMG alternated between employments at Abraaj and KPMG. Harvard academics and professors wrote undisguised encomiums about Abraaj and Arif without even lifting the proverbial carpet that would have revealed the loot. Incidentally these professors were employed by Abraaj as consultants.
Arif Naqvi may either meet his deserving fate or he may even go Scot free. But the bigger and more introspective fall out of this ugly scandal is the frightening proposition that we might not even be plumbing the tip of a gigantic and tarnished iceberg. Private Equity firms are the most unregulated of all the financial institutions in the world today. Author John Coates in his fascinating book The Problem of 12 informs his readers that four behemoth funds hold for approximately one fifth of the stock shares across corporate America. These powerful funds are quite opaque when it comes to corporate governance practices and decision parameters. A lack of public awareness offers meagre incentives for politicians to act. “Power without accountability is always dangerous”.
And as the story of Arif Naqvi and Abraaj illustrates, it is indeed!