11/07/2018 07:41 AST

First Abu Dhabi Bank (FAB) on Tuesday said it gave Abraaj a $21.4 million (Dh78.6 million), three-year secured loan that matures in April 2019. The revelation sees FAB join a growing list companies that have disclosed their exposure to the embattled private equity fund.

More than two dozen companies listed on the Abu Dhabi Securities Exchange disclosed their dealings with Abraaj, but only two, FAB and Emirates Insurance, had exposure.

The loan was “collateralised with Abraaj Holdings’ stakes in its funds, which invested in various companies globally,” FAB said in a statement posted on the Abu Dhabi Securities Exchange’s website. Emirates Insurance also disclosed a $2.4 million investment in the Abraaj Buyout fund II. Abraaj has been accused of misusing funds by investors that include the Bill & Melinda Gates Foundation and the International Finance Corp. The funds were meant for investments in health care.

The biggest private equity firm in the Middle East and North Africa (Mena) has since filed for provisional liquidation in the Cayman Islands. It also defaulted on loans made to the company, which resulted in a criminal case in a Sharjah court related to a bounced security cheque. Companies that said they had no exposure to Abraaj were Eshraq Properties, Sharjah Cement and Industrial Development Co, Invest Bank, National Corporation of Tourism and Hotels, Foodco Holdings, RAK Bank, RAK Properties, Al Wathba National Insurance, Union National Bank, Abu Dhabi Commercial Bank, RAK Ceramics, and Emirates Driving Company.

The disclosures came after the UAE’s Securities and Commodities Authority (SCA) asked listed companies to disclose any exposure they might have to the private equity firm.

Appropriate action

The UAE’s Securities and Commodities Authority (SCA) revealed on its Twitter account on Monday that the “commission is currently investigating a number of irregularities attributed to some listed companies and appropriate action will be taken in accordance with the law.” Earlier, Air Arabia revealed that it had about $336 million invested in Abraaj’s funds while Dana Gas has about $6 million (Dh22 million) invested in the Abraaj Infrastructure Fund.

Dubai-listed Mashreq is one of a group of lenders that have reportedly provided money to Abraaj on a bilateral basis under secured loans, but it has not disclosed any details on that loan.

Other lenders include the Commercial Bank of Dubai, Noor Bank, and French bank Societe Generale. Abraaj Group manages almost $14 billion in assets for various investors, including many institutions such as sovereign wealth funds, large pension funds and foundations.

Corporate governance shortcomings related to the Abraaj mess have had a negative impact on listed companies on the Dubai Financial Market (DFM), according to Al Mal Capital.

The DFM General Index has shed 14 per cent since the start of the year, compared to 6 per cent gains witnessed by the Abu Dhabi index.


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