Private equity firm Al Masah Capital has been placed into voluntary liquidation in the Cayman Islands months after the company and several of its employees were fined by the Dubai Financial Services Authority for misleading investors about fees charged.
The company appointed Martin Trott of R&H Restructuring (Cayman) Ltd in the Cayman Islands and Shahab Haider of Sajjad Haider Chartered Accountants in Dubai International Financial Centre as joint voluntary liquidators of the company, according to a filing. The liquidation was initially reported by Bloomberg.
DIFC-based Al Masah Capital Management and its parent company Al Masah Cayman were founded in 2010 and in a court filing earlier this year it was said to have raised $1 billion from investors. The company's paid up capital according to the public register of the Dubai International Financial Centre is $3 million.
Al Masah Cayman managed four investment companies – Avivo Group, Al Najah, Gulf Pinaccle Logistics and Diamond Lifestyle. Al Masah Capital Management identified and evaluated potential investments for its parent and marketed shares in the investment companies in the DIFC.
The DFSA took action against both Cayman Islands-based Al Masah Capital and DIFC-based Al Masah Capital Management in September last year, finding that it had not informed investors of a placement fee equating to 10 per cent of all funds raised from investors.
The regulator fined Al Masah Capital $3m, Al Masah Capital Management $1.5m. The DFSA also fined and banned three of the company's key individuals from "performing any function in connection with provision of financial services in or from the DIFC".
Chief executive Shailesh Dash received a fine of $225,000, chief financial officer Nrupaditya Singhdeo was fined $150,000 and executive director Don Lim Jung Chiat was also fined $150,000.
Mr Dash, who is in Dubai and involved in other businesses, declined to comment on the record, when reached by The National. Rashid Aleem, senior manager at Meralis Chartered Accountants & Registered Auditors, listed on the DIFC website as the auditor of Al Masah Capital Management Limited, declined to comment.
The DFSA announced its actions in May this year, following the conclusion of a privacy application hearing on the ruling that had been requested by the companies and its officers. The companies also disputed the DFSA's findings and appealed to the regulator's Financial Markets Tribunal. The appeal is still ongoing.
The DFSA argued in the privacy hearing earlier this year that the role of managing the four investment companies previously owned by Al Masah Cayman had been passed on to Regulus Capital in 2016, a company founded Mr Dash.
The DFSA described the shift as "in effect, a 'phoenix' of Al Masah Cayman" with the same board and management team. Regulus Capital was not available to comment when contacted by The National.
In an interview with The National on Tuesday, the DFSA's chief executive, Bryan Stirewalt declined to comment on Al Masah Capital's liquidation, given that the appeal is still outstanding.
However, when asked about the actions the regulator has taken in cases such as this, Mr Stirewalt said "enforcement actions can bring strength to the financial sector to show that there are rules and we take those rules seriously".
"This should have a positive impact on Dubai’s standing as a financial centre. People should know that in a regulated environment, we take rules seriously," he said.
"We will treat breaches of those rules in a serious manner. And that may include penalties for those who caused the violations."
