NEW YORK – Arif Naqvi, founder of the embattled private equity firm Abraaj,who is now facing corruption allegations, offered a $20 million payment tobusinessman Navaid Malik to sell its stake in Pakistan-based K-Electric Ltdthrough the assistance of then Prime Minister Nawaz Sharif and his brother,Shehbaz, The Wall Street Journal (WSJ) claimed in a lengthy investigativereport.
Citing the Dubai-based firm’s emails and ‘people familiar with thesituation’, the report said Naqvi, a Pakistani businessman, needed Sharifs’“cooperation” as the Pakistan government owns a stake in K-Electric, whichsupplies electricity to Karachi, and its approval would be required for thesale to go through.
Shehbaz Sharif, the former Punjab chief minister who now heads PML-N, was‘willing to give a strong endorsement’ of the deal to Chinese bidders,Malik said, according to the newspaper report, which cited a October 2015email to Naqvi from Abraaj partner Omar Lodhi. Malik said it was “importantfor him to share every detail with the brothers and get their blessings aswell as their instructions as to how this money should be distributed,”suchas “a portion to charity”or “a portion to the election fund kitty,” Lodhireportedly wrote in the email.
When Naqvi emailed Lodhi about the $20 million contract for Malik in June2016, he wrote, according to WSJ, “This document is explosive in the wronghands.” Abraaj and K-Electric shouldn’t be named in the document, he wrote:“Keep it generic.”
“Noted,” Lodhi responded, according to WSJ, which said Malik didn’t respondto requests for comment.
In a report documenting Abraaj’s fall, the newspaper said it began inFebruary when an article from WSJ reported that investors were questioningthe use of their investments destined for company’s healthcare fund. Naqviset up a healthcare fund by securing commitments from Bill and MelindaGates Foundation and other Western Institutions. The fund’s investmentsinclude Islamabad Diagnostic Centre in Pakistan and hospital chain QualityCare India.
Read Top Stories
The article claims that, “documents from liquidators, auditors andinvestors show that Abraaj moved investor money meant for hospitals andcompanies into accounts that paid its own expenses, salaries and loans.Abraaj founder Arif Naqvi denies any wrongdoing and says the transfers wereappropriate.”
The article which pointed out some of the known details of the fund’scollapse include using investor’s money to pay for its own expenses,borrowing money against its own stakes in its funds and a highly unstablebusiness model. The article alleges that, “Abraaj has defaulted on morethan $1 billion of debt.”
Meanwhile, Arif Naqvi has denied media reports that he was involved incorruption surrounding the sale of the embattled private equity fund’sstake in Pakistan’s K-Electric and again denied any misuse orappropriation of Abraaj funds. – APP
