The Dubai Financial Services Authority (DFSA) has taken enforcement action against two firms in the Adenium group of companies (the Adenium Group), and two associated individuals for a number of breaches of DFSA legislation including unauthorised financial services activities.

The firms are Adenium Energy Capital Ltd (Adenium Cayman), a Cayman Islands registered company now in liquidation, and Adenium Energy Capital Advisors Limited (AECAL), a DFSA Authorised Firm also now in liquidation.  Adenium Cayman and AECAL belong to the Adenium Group, which invested in and managed solar energy projects in a number of countries.

The two individuals are Mr Wassef El Sawaf, the former Chief Executive Officer of Adenium Cayman and the former Senior Executive Officer of AECAL, and Mr Youssef Fouad Chaker, the former Chief Legal Officer of Adenium Cayman and a former Licensed Director of AECAL.

The DFSA imposed the following financial penalties:

• AED4,613,483 (USD1,256,224) on Adenium Cayman;
• AED354,337 (USD96,484) on AECAL.  The amount of the fine was reduced because AECAL agreed to settle this matter.  Were it not for this reduction, the DFSA would have imposed a fine of AED506,199 (USD137,835) on AECAL;
• AED483,301 (USD131,600) on Mr El Sawaf.  The amount of the fine was reduced by 20% due to Mr El Sawaf’s cooperation with the DFSA, and then by a further 30% because he agreed to settle this matter.  Were it not for these reductions, the DFSA would have imposed a fine of AED863,037 (USD235,000) on Mr El Sawaf; and
• AED271,471 (USD73,920) on Mr Chaker.  The amount of the fine was also reduced by 20% due to Mr Chaker’s cooperation with the DFSA, and then by a further 30% because he agreed to settle this matter.  Were it not for these reductions, the DFSA would have imposed a fine of AED484,770 (USD132,000) on Mr Chaker.

The DFSA found that:

• Adenium Cayman engaged in unauthorised financial services activities, including illegally marketing unregulated Collective Investment Funds; and
• AECAL was knowingly involved in Adenium Cayman’s breaches and itself breached a number of DFSA Rules relating to customer on-boarding, client classification, capital requirements and systems and controls.

The DFSA further found that Mr El Sawaf and Mr Chaker:

• were knowingly involved in Adenium Cayman’s and AECAL’s breaches; and
• breached a number of the DFSA’s Principles for Authorised Individuals.

F. Christopher Calabia, Chief Executive of the DFSA, said: “The DFSA will not tolerate DIFC based corporate groups that have only one entity regulated by the DFSA, but create the impression that all of the group’s financial services are regulated by the DFSA and onboard clients with another group entity that is not subject to DFSA regulation.”

Copies of the Decision Notices setting out full details of this matter can be found in the Regulatory Actions section of the DFSA website.