Dubai Buyout Firm Al Masah Liquidated After Its Founder Banned

(Bloomberg) -- Al Masah Capital Ltd., once among the Persian Gulf's most active private equity companies, is being liquidated after being fined for allegedly misleading investors about fees, according to court filings in the Cayman Islands.

The company's collapse comes after Dubai's financial watchdog in May penalized Al Masah, its founder Shailesh Dash, and two other executives on accusations that they also provided unauthorized services. The individuals were banned from working in the emirate's financial center.

The company, Dash and the two others dispute the watchdog's findings and are appealing the charges in front of a local tribunal, according to the regulator. The voluntary liquidation was filed after an extraordinary general meeting called by two of Al Masah's shareholders.

“Following the issuance of that fine, each of the employees of the company either left the company or resigned,” according to the Cayman court documents, which didn't specify which staff had left. This left Al Masah “effectively incapacitated,” the filings show.

Read more: Dubai Watchdog Fines Al Masah Capital, Bans Firm's Founder Dash

Joint liquidators were appointed for Al Masah, which includes the Cayman-registered entity and its main Dubai operating subsidiary in August, according to the court notice. Cayman-based R&H Restructuring (Cayman) Ltd. confirmed its appointment alongside that of Sajjad Haider Chartered Accountants LLP.

Founded in 2010, Al Masah had 53 employees with offices in Abu Dhabi and Singapore, according to information on its website before it was taken down in recent weeks. It said it had raised more than $1 billion across multiple asset classes with a focus on health care, education, food and logistics. It isn't clear how much debt the two entities placed into liquidation owe.

Dash didn't answer calls to his mobile phone or respond to emails. Representatives for Al Masah didn't respond to emails seeking comment. Representatives for law firm Walkers LLC, at whose offices the meeting to decide to dissolve the company took place, declined to comment. A spokeswoman for the Dubai Financial Services Authority declined to comment on ongoing cases.

Al Masah's demise marks another blow to the regional private equity industry following the high-profile downfall of Abraaj Group, which was fined a record $315 million last year for lying to investors and misappropriating funds.

Read more: The Firm That Wrecked Private Equity for the Middle East

Gulf companies, including Abu Dhabi hospital operator NMC Health Plc and foreign-exchange house Finablr Plc, have also been dragged into accounting scandals.

Legal Woes

Al Masah's regulatory problems date back to 2015 after a whistle-blower complaint by a former employee at one of its businesses triggered the regulator's investigation.

It was shortly afterwards that Dash started Regulus Capital Ltd., which then took over as the manager of some of Al Masah's investments. That's according to the transcript of a hearing held earlier this year at the Dubai Financial Centre Financial Markets Tribunal to determine whether the regulator can publicly disclose the action taken against Al Masah and its directors.

Dash is listed as the founder of Regulus and Future Capital Ltd. on the latter company's website. He is also a board member of UAE-based financial firm Allied Investment Partners PJSC, according to its website. Representatives for Regulus didn't respond to emails seeking comment, while calls to the company's headquarters weren't answered.

“Regulus is in effect, a ‘phoenix' of Al Masah Cayman and the board of Regulus comprises the same individuals that formed the board of Al Masah Cayman,” the DFSA said in the January filing.

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