LONDON: A year-and-a-half after the arrest of the founder of collapsed private equity firm Abraaj, Arif Naqvi, in London, a magistrate’s court ruled in favour of United States prosecutors who sought his extradition.

The US Department of Justice has indicted Arif Naqvi in a range of offences, including defrauding investors and money laundering. If found guilty of all charges, he could be sentenced to up to 291 years in a US prison.

Mr Naqvi appeared before Judge Emma Arbuthnot at the Westminster Magistrates Court in Marylebone on Thursday morning with his two sons. Due to Covid-19 restrictions, all attendees wore masks and observed distancing.

Rachel Kapila, a lawyer representing the US government, attended the proceedings through a video link.

Arif Naqvi to challenge decision, thanks judge for ‘compassion irrespective of outcome’

Addressing Mr Naqvi’s lawyer Hugo Keith QC, Justice Arbuthnot said: “I have rejected the arguments raised by you and am ordering the case to be sent to the Secretary of State for her decision. Therefore, under section 92 of the Extradition Act 2003, he [Mr Naqvi] has the right to appeal once her decision is made.”

The judge also agreed to amend one aspect of Mr Naqvi’s bail condition by allowing him to change his daily window for outdoor exercise from 4pm-6pm to 2pm-4pm.

Since he was granted bail in May 2019, Mr Naqvi has been confined to his apartment in South Kensington where he is electronically monitored under a 24-hour curfew unless he is to meet lawyers or doctors.

At the conclusion of the hearing, Mr Naqvi raised his hand to make made a statement to the judge. “I wanted to say thank you for the human compassion you showed in the trial, irrespective of the outcome. I congratulate you on your elevation,” he said.

Justice Arbuthnot was elevated to the High Court of England and Wales in 2020. She has been a senior district judge at the magistrates court since 2016.

Mr Naqvi’s lawyers are expected to appeal the verdict once UK Home Secretary Priti Patel makes a decision. Typically in extradition cases, the secretary of state decides whether to order the extradition of an individual as the request is made by a country to the Home Office.

Detailed judgement

Arif Naqvi’s lawyer built his case on the issues of ‘forum’; the weight to be afforded to the assurances given by the US; pre-trial and during trial prison conditions; and a fair trial.

In earlier hearings, his lawyer argued that extradition would violate Mr Naqvi’s human rights as poor jail conditions in the US increase the risk of suicide if he was detained ahead of his trial. The ‘forum bar’, which Justice Arbuthnot addressed at length in her judgement, empowers British courts to refuse extraditions if the UK is the more appropriate place or forum where the criminal case should be heard.

Mr Naqvi’s lawyers argued that a substantial measure of his activity was performed in the United Kingdom. The judgement noted their position but decided that the “alleged fraud on the dates relied on was against for the most part US-based investors by a branch of Abraaj based in New York”.

“The loss is in the US, some of the misrepresentations were made by the RP [requested person] in the US and the funds were due to be invested not in the UK but in developing countries,” the detailed judgement said.

“I accept his family has lived in London for some years but I noted that at the time of the hearing in December 2020, his wife was in Pakistan. He has strong ties to that country and one of the allegations is that he bribed an official there to assist the Abraaj business,” it added.

The judge said that while there were a number of administrative functions relating to the funds which took place in London, a “substantial measure of the relevant activity was not in the UK” and that “there is no doubt that the US is where most of the loss and harm has resulted”.

The most important factor Justice Arbuth not took into account in terms of Mr Naqvi’s connection to the UK is that he is currently receiving medical treatment here. “There is no doubt that a move will disrupt this relationship and would mean a change in his doctors.”

She noted that Mr Naqvi had bowel cancer diagnosed in 2015 followed by an operation, and added that “there is no doubt that the RP has poor mental health”.

However, she accepted the prosecutor’s assurance that Mr Naqvi would be granted bail pending trial in the US and also the assurance that if bail was denied, then Mr Naqvi would not be held in either the Manhattan’s Metropolitan Correctional Centre (MCC) or Brooklyn’s Metropolitan Detention Centre (MDC) as his lawyer had serious reservations about the conditions of these facilities.

Collapse of Abraaj

On May 23, 2019, the US District Court charged Arif Naqvi and others in Abraaj with 16 counts of fraud and money laundering committed between 2014 and 2018.

Mr Naqvi was arrested on April 10, 2019 at Heathrow Airport on his way from Islamabad and detained at Wandsworth prison for nearly a month. He was granted conditional bail on May 1, 2019, with a curfew condition and a GBP 15 million security— a record bail security in the UK — which his family submitted to the court to secure his release on May 29, 2019.

He is accused of conspiring to inflate valuations of positions held by Abraaj in order to obtain greater investment from US investors, allegedly causing them financial loss. Mr Naqvi denies these charges.

Prior to the collapse of Abraaj and the subsequent charges against him, Mr Naqvi was a prominent and celebrated name in the private equity world. He founded Abraaj Group in 2002 to invest in emerging markets in the Middle East and North Africa, and in 2012 acquired private equity firm Aureos Capital to expand investments to Latin America, Sub-Saharan Africa and South East Asia.

In 2018, Abraaj was seen as the biggest private equity firm in the world, with 290 employees and offices in 18 countries. By January 2018, it reportedly managed $13 billion across funds, and boasted the likes of Bill and Melinda Gates Foundation as investors.

In June 2019, Abraaj Group collapsed into insolvency. The following year, entities and individuals asserted losses of a reported $1 billion against Abraaj.

On May 23, 2019, the US District Court charged him with securities fraud, wire fraud and money laundering in a blistering indictment. Pending extradition, Mr Naqvi will face trial in the US.

Published in Dawn, January 29th, 2021

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