ISLAMABAD: After a dispute with some of its investors in a $1 billion healthcare fund focusing on the developing world, a Dubai-based private equity firm — Abraaj — has hired a reputable international auditing firm.
KMPG has been tasked with verifying all receipts and payments made by the Fund were in accordance with the International Standard on Related Services, a standard which is issued by the International Auditing and Assurance Standards Board.
Abraaj manages more than $13.5 billion and invests across growth markets in Africa, Asia, Latin America, the Middle East and Turkey.
The New York Times and the Wall Street Journal had earlier reported that The Bill & Melinda Gates Foundation, the World Bank's International Finance Corp unit, and two other investors had complained that some of its funds were not used for the agreed projects and may have been used for other Abraaj projects instead. According to Abraaj senior executives, the company has returned the unused capital to all investors in the Fund at the end of December 2017 and is confident that KPMG will confirm that all the funds were accounted for and used appropriately and as per agreement.
The World Bank's own unit that looks into cases of corruption had investigated Abrraj and found no evidence of wrongdoing.
Abraaj issued a statement on Sunday admitting however that some capital was not used as quickly as anticipated due to unforeseen political and regulatory developments in several of the Fund's operating markets. The company said, "These delays were regularly communicated to investors through quarterly General Partner Reports and other investor communications" and that "all capital that was drawn from AGHF investors was for approved Fund investments."
The private equity fund also stated that the terms of the Limited Partnership Agreement allow the Fund to retain called capital “in situations where an investment is delayed but still approved and not cancelled."
The investment firm clarified that its own external legal counsel has issued an opinion confirming its fund management practices were consistent with the Limited Partnership Agreement for AGHF.
The Abraaj Growth Markets Health Fund has been recognized by many in the venture capital and developing sector as an innovative solution to address the healthcare needs of tens of millions of people across South Asia and Sub Saharan Africa. According to company records in 18 months, the Fund has served almost two million people through 24 hospitals, 30 diagnostic centres and 17 clinics.
The New York Times in its reporting also noted that, "In the past, governments and foundations led the way, via direct loans and grants. But over the past year, Mr. Kim (The World Bank president) and Mr. Gates have argued that it is possible for large pools of capital — such as private equity funds, insurance companies and pension funds — to score big profits by, for example, investing in hospitals in Pakistan and Nigeria. Mr. Kim recently has singled out Abraaj and (its founder) Mr. Arif Naqvi for praise."
Arif Naqvi established The Abraaj Group in 2002 which is recognized as a pioneer of growth markets investing with over 17 offices including five regional hubs in Dubai, Istanbul, Mexico City, Nairobi and Singapore. Mr. Naqvi is a Trustee of the Interpol Foundation, Board Member of the United Nations Global Compact and an Honorary Fellow of the Royal College of Art in London. Mr. Naqvi has been the recipient of numerous awards, including Sitara-i-Imtiaz, a prominent civilian honour awarded by the Government of Pakistan. In 2008, Arif Naqvi donated over $100 million to establish Aman Foundation, a not for profit social sector enterprise that helps sustainable development in healthcare, nutrition and education in Pakistan. It is known to be one of the largest donations in Pakistan by an individual family.
from The News International - National
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