ISLAMABAD: Some internal documents of Abraaj Group leaked to the media have revealed that millions of dollar funds of the company were transferred to personal accounts of Arif Naqvi which were allegedly used to pay for securing deal of K-Electric during the tenure of former prime minister Nawaz Sharif.
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A story published in Wall Street Journal (WSJ) states that in 2016, Abraaj raised most of the money for its $1 billion health-care fund, securing commitments from Western institutions, including the Gates Foundation. The fund invested in companies such as Pakistan’s Islamabad Diagnostic Centre and the hospital chain Quality Care India. The fund’s hospitals and clinics employed a total of 3,800 nurses at the start of this year.
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Abraaj also used the fund for unauthorised purposes, a legal letter from investors said. More than $270 million was sent to Abraaj treasury accounts, excluding fees, according to the letter and investigators’ documents. At least another $390 million was similarly tapped from two other Abraaj funds, according to investigators’ documents.
Naqvi said: “Substantial monies went from Abraaj Funds to ‘Abraaj treasury.’ However, substantial monies were also transferred in the opposite direction.” All transfers were recorded, he added.
Abraaj’s treasury accounts transferred more than $200 million to Naqvi’s personal accounts at Deutsche Bank AG and Coutts & Co. and to companies linked to him, his family and a former assistant, according to bank statements and company emails and documents.
Naqvi said he was “perfectly entitled to direct” funds drawn from Abraaj and that there was nothing untoward about those transfers. Payments were recorded as his personal liability to the company. Naqvi received $60 million in bonuses between 2015 and 2016, according to people familiar with the situation and a company email.
Around the same time, Abraaj was looking to sell its stake in K-Electric Ltd., the electricity provider to Karachi. Naqvi tried to secure the cooperation of Pakistan’s then-prime minister, Nawaz Sharif, and his brother Shahbaz, offering a $20 million payment to businessman Navaid Malik for his help in getting it, according to company emails and people familiar with the situation. The government owns a stake in K-Electric and its approval would be required for the sale to go through.
Shahbaz was “willing to give a strong endorsement” of the deal to Chinese bidders, Malik said, according to an October 2015 email to Naqvi from Abraaj partner Omar Lodhi. Navaid Malik said it was “important for him to share every detail with the brothers and get their blessings as well as their instructions as to how this money should be distributed,” such as “a portion to charity” or “a portion to the election fund kitty,” Lodhi wrote in the email.
When Arif Naqvi emailed Omar Lodhi about the $20 million contract for Malik in June 2016, he wrote, “This document is explosive in the wrong hands.” Abraaj and K-Electric shouldn’t be named in the document, he wrote: “Keep it generic.” “Noted,” Lodhi responded. Malik didn’t respond to requests for comment.
In his statement, Abraaj Group chief Arif Naqvi said: “The allegations against me are entirely false and vehemently denied. They are premised on isolated extracts from illegally obtained documents that have been taken entirely out of context. It appears that unidentified individuals who are unfairly biased against me and Abraaj are seeking to undermine the sale of K-Electric, damage mine and Abraaj’s reputation, and thereby prejudice the creditors of the Abraaj Group. I can say unequivocally that I have never contemplated, directed, authorised or paid any bribes with respect to the K- Electric sale. I am a patriot of Pakistan and the sale was and very much remains in the best interest of the country."
He said Navaid Malik was an Abraaj adviser on a variety of activities and that the contract was part of a lengthy discussion about the terms of that role. He said the final agreement “ensured that no conflict of interest would occur.” He said he called it “explosive” due to a reference to the potential sale of K-Electric, which was confidential at the time.
In October 2016, Abraaj announced the sale of the majority stake it controls in K-Electric to China’s state-controlled Shanghai Electric Power Co. for $1.77 billion. However, completion of the sale was delayed by regulatory hurdles.
K-Electric still hasn’t been sold. A lawyer for the Sharif family said the brothers deny any discussions took place with Malik as described in the emails. Nawaz Sharif's party -- PML-N -- sources said that they were mulling over sending notice the WSJ.
