Securities and Exchange Commission on Thursday filed a civil lawsuit in federal court against defunct private equity firm Abraaj Investment Management and Abraaj founder and CEO Arif Naqvi for fraud and the alleged misappropriation of more than $230 million from Abraaj’s health-care fund.
Abraaj Investment Management and Naqvi allegedly falsely reported to the Abraaj Growth Markets Health Fund and its investors that their money would be invested in health care-related businesses in emerging markets. Instead, the SEC’s complaint, filed in U.S. District Court in New York, alleges the money was used to cover cash shortfalls at Abraaj Investment Management and its parent company, Abraaj Holdings Ltd., a separate company largely owned by Mr. Naqvi.
The SEC is asking the federal court to enjoin Abraaj and Mr. Naqvi from violating federal securities laws in the future, disgorgement of all ill-gotten gains, with prejudgment interest and civil monetary penalties.
Investors in the Abraaj Growth Markets Health Fund include CDC Group, Bill and Melinda Gates Foundation, health-care operators Philips and Medtronic, as well as the African Development Bank and France’s Proparco, according to a statement on the CDC Group’s website.
Mr. Naqvi could not be reached for comment. Abraaj Group is in provisional liquidation in the Cayman Islands.