Deloitte to review Abraaj finances after investors question KPMG review

Private equity group Abraaj has hired Deloitte to review its business, after investors raised concern over the potential mishandling of a $1 billion healthcare fund and were unsatisfied with a KPMG review.

The dispute began when four of Abraaj’s high-profile investors, including the Bill & Melinda Gates Foundation and the World Bank’s International Finance Corp unit, alleged that money intended for medical projects in India, Pakistan, Kenya and Nigeria had been misused.

Abraaj claimed that perceived discrepancies within its healthcare fund were due to construction delays and regulatory hurdles.

The investors hired forensic accountants Ankura Consulting to investigate the funds while Abraaj separately hired KPMG.

KPMG’s month-long review found that all payments and receipts in the fund were in line with agreed procedures, but investors were concerned the review was rushed and therefore not comprehensive.

Abraaj has now called on Deloitte to undertake a separate review.

The company has already undergone an internal shake-up since tensions with investors began.

Holding $13.6 billion in assets under management, Abraaj temporarily halted investment activities in February as CEO and founder Arif Naqvi stepped down.

The group was split into Abraaj Investment Management Ltd (AIML) and Abraaj Holdings, and Naqvi handed over the running of the fund to co-chief executives Omar Lodhi and Selcuk Yorgancioglu.

The company said the re-organisation had been in the pipeline for a while.

Naqvi continues as CEO of Abraaj Holdings and holds a non-executive role as a member of the global investment committee of AIML.

Under mounting pressure from investors, Abraaj is reportedly also looking to sell its private-equity business.