Former Abraaj executive gets bail in New York in fraud case

A U.S. district court has granted bail to a former managing partner of collapsed private equity firm Abraaj, Mustafa Abdel-Wadood, on condition that he sign a $10m bond and remain confined to a New York apartment, court documents showed.

Abdel-Wadood and Arif Naqvi, founder of Dubai-based Abraaj, were arrested earlier this month on US charges that they defrauded their investors, including the Bill & Melinda Gates Foundation.

A bail order from the U.S. District Court for the Southern District of New York, dated April 29, said Abdel-Wadood’s personal bond would be co-signed by four individuals and secured by an apartment in New York and a home on Long Island, owned by two of the co-signers.

Abdel-Wadood would be subject to home “incarceration” in New York and wear an electronic monitoring device.

Naqvi was arrested in London in the same case and has been remanded in custody there until a May 24 hearing for his extradition to the United States.

Naqvi had pleaded his innocence through a statement by his PR firm, while Abdel-Wadood could not be reached for a comment.

The U.S. Securities and Exchange Commission alleges that Naqvi and his firm raised money for the Abraaj Growth Markets Health Fund, collecting more than $100m over three years from US-based charitable organisations and other US investors.

According to the SEC’s complaint, Naqvi misappropriated money from the health fund and commingled the assets with corporate funds of Abraaj Investment Management Ltd and its parent company, and used it for purposes unrelated to the health fund.