The Chris Voss Show - The Chris Voss Show Podcast – The Key Man: The True Story of How the Global Elite Was Duped by a Capitalist Fairy Tale by Simon Clark, Will Louch

Episode Date: July 11, 2021

The Key Man: The True Story of How the Global Elite Was Duped by a Capitalist Fairy Tale by Simon Clark, Will Louch In this compelling story of lies, greed and tarnished idealism, two Wall Street Journal reporters investigate a man who Bill Gates, Western governments, and other investors entrusted with billions of dollars to make profits and end poverty, but who now stands accused of masterminding one of the biggest, most brazen financial frauds ever. Arif Naqvi was charismatic, inspiring, and self-made—all the qualities of a successful business leader. The founder of Abraaj, a Dubai-based private-equity firm, Naqvi was the Key Man to the global elite searching for impact investments to make money and do good. He persuaded politicians he could help stabilize the Middle East after 9/11 by providing jobs and guided executives to opportunities in cities they struggled to find on the map. Bill Gates helped him start a $1 billion fund to improve healthcare in poor countries and the UN and Interpol appointed him to boards. As Pope Francis blessed a move to harness capitalism for the good of the poor, Naqvi won the support of Obama’s administration and investors, who compared him to Tom Cruise in Mission: Impossible. In 2018, Simon Clark and Will Louch were contacted by an anonymous whistleblower who said Naqvi had swindled investors out of hundreds of millions of dollars and offered bribes to sustain his billionaire lifestyle. Digging into the claims, Clark and Louch uncovered hundreds of documents and exposed the wrongdoing. In April 2019—months after their exposé broke—Naqvi was arrested on charges of fraud and racketeering, and faces up to 291 years in jail. Populated by a cast of larger-than-life characters and moving across Asia, Africa, Europe and America, The Key Man is the story of how the global elite was duped by a capitalist fairytale. Clark and Louch shine a light on efforts to clean up global capital flows even as opaque private equity firms amass trillions of dollars and offshore tax havens cast a veil of secrecy which prevents regulators, investors and citizens from understanding what’s really going on in the finance industry.

You wanted the best. You've got the best podcast, the hottest podcast in the world. The Chris Voss Show, the preeminent podcast with guests so smart you may experience serious brain bleed. Get ready, get ready, strap yourself in. Keep your hands, arms and legs inside the vehicle at all times. Because you're about to go on a monster education roller coaster with your brain now here's your host chris voss hi folks this is voss here from the chris voss show.com the chris voss show.com hey we're coming here with another great podcast we certainly appreciate you guys tuning in thanks for being here go to youtube.com for just chris voss hit that bell notification you can see all the wonderful things that we're

reading or viewing on the Chris Voss Show. You can go to goodreads.com for just Chris Voss, Facebook, LinkedIn, Twitter, all those different places and see everything we're taking and doing. We've got a brilliant roundup today. We've got the authors of the new book coming out July 8th, 2021. The name of the book is called The Key Man, How the Global Elite Was Duped by a Capitalist Fairytale. This is going to be a pretty interesting read to talk about today. We have the two authors of the book, Simon Clark and Will Lout. Simon Clark is a journalist for the Wall Street Journal in London. He's reported on a wide range of investigative stories which have led him to the

poppy fields of Afghanistan, the copper mines of Congo, and to lots of banks in the city of London. He was nominated for a Pulitzer Prize in 2016. He lives in Sussex, England. Blouch is a former Wall Street Journal reporter based in London and New York. And before that, he was based in Brussels, where he wrote about the European politics, and he's currently at law school in London. Welcome to the show, guys. Congratulations on the launch of your new book. Thanks very much, Chris. Thanks, Chris.

Thank you. And thanks for coming, guys. So give us your plugs.com so people can find you on the interwebs and find out more about who you guys are and what you're doing. So we've written a true crime story about globalization gone wrong. The key man is Arif Naqvi, who out of Dubai built the largest private equity firm operating in developing countries and emerging markets across Africa, South Asia and Latin America. And his pitch was that he would make money for investors,

end global poverty at the same time. And with this pitch, he raised billions of dollars from billionaires like Bill Gates and governments. The US government was an investor. UK and France were investors. US pension funds in Washington, Louisiana, Texas, and Hawaii were investors. So he raised this money, and the Department of Justice has accused him of stealing quite a lot of it. And now he faces up to 291 years in jail if found guilty. He says he's not guilty. The case is ongoing. So did Bernie Madoff.

Do you want to tell us why you guys wrote this book? What motivated you guys? What got you guys to sink your teeth in? Sure. So we first started reporting on this story in January 2018. So about three and a half years ago, we were both at the time working in London as reporters covering finance and specifically private equity. I received an anonymous tip off from a whistleblower that things were not all going so well at Abrage and that some investors, including the Gates Foundation and a unit of the World Bank, were investigating where hundreds of millions of dollars of their money had gone. Abraj was managing their money because they'd raised a fund which totaled one billion dollars,

which was meant to build hospitals and diagnostic centers in Africa and Asia. And yeah, we received this email. And that's really where the story began. Three and a half years later, we've got a book which is coming out next week. And there's a lot in between, which we'd like to fill you in on over the course of the next half an hour, 45 minutes or so. Let's get into it. Let's get into it. So how does this whole thing begin? Who's this guy? And what's the origin story of how this whole thing starts out? Grammar School, which was founded by the British over 100 years before. So he's going to an English language school, and he's an excellent scholar. He speaks English very well. He goes from there to the London School of Economics, and then he goes into the financial world, working in London, and then Karachi in Pakistan, and then in Saudi Arabia before he finds his

best working environment in Dubai, which is open to people from all over the world to go and work there and start firms. And that's what he did. He was a very successful investor, very shrewd initially. And from 2002 onwards, he builds his company Abraj into a very large investment vehicle, raising money from the US, from Europe, buying companies and hospitals in Pakistan, India, Kenya, South Africa. And along the way, his pitch evolves from just making money, which is hard, to making money and ending poverty at the same time, which is even harder. The argument being that if

he invests in hospitals, he's providing health services, or if he's investing in food companies, he's creating jobs, providing new products in countries where they're lacking. Some of that did happen, but there was financial goings on as well within the firm which meant that money was was not exactly all going where it should have been going so will as he said got a got an anonymous email from someone who we still don't know who that is in february 2018 and this person laid out problems within the company because we don't know who that person is, we couldn't write an article based on this email. But what this email did was gave us a tip that there's something going on. And what we did with that was we then went and contacted dozens of people

within a branch, their investors, regulators, to find out exactly what was going on, to gather evidence, documents, and then publish articles. And that's what we did. And this is pretty interesting. Is this like a Theranos story? Like, how long does this go on where this gentleman raises money and dupes everyone for a while? It is indeed a Theranos story gone large in the Middle East. In fact, our literary agent is the same guy for Bad Blood, which was written by a colleague of ours at the Wall Street Journal. And he rang me up and said, this story is like Bad Blood. Would you like to write a book about it?

And so we said yes. So it wasn't actually our idea to write the book it was actually our agents oh wow there you go so is this a big story because a lot of us haven't heard about this story in america and of course we've been busy with our own our own kind of newsmakers but is this a big story overseas in england dubai or is this still coming out or are these billionaires trying to keep it quiet because it's embarrassing it's a it's a very big story in dubai because abraj was like the spirit of dubai arif is a very articulate public speaker he unlike many private equity tycoons he he enjoyed publicity and being on the public stage. He was a constant presence at Davos, the World Economic Forum, and other forums around the world. The story went large

in 2018 when we put it on the front page of the Wall Street Journal about the alleged fraud and theft and bribery that had gone on. The issue is that private equity is a very secretive industry. And a lot or none of the investors want to talk about it publicly for two reasons. One is there's a huge amount of ongoing litigation. So there's a criminal indictment of six senior executives, the sec has also launched a civil case so none of these investors the world bank the washington state pension fund the gates foundation uk government bank of america none of them want to talk about this for that reason they also don't want to talk about it because i think they don't want to attract attention to it because it makes them look like they possibly weren't doing their jobs as well as they should have been doing.

We think it's a very important story because capital money moves around the world. The US is the beating heart of the global economy. Money is moving in and out of the United States for various reasons. And it needs to do that in a proper way. And we're trying to shine a light on some very dark corners of the global economy to show how money is misused, how it can be used to genuinely promote living conditions in countries where conditions are not great and how sometimes people are hijacking those financial flows for their own gain wow and so it was a lot of this money that

was donated to these to like charities and stuff to give to bill gates and say give that to that other guy and that's one of the things that's really surprising about this whole thing is or controversial maybe is because this was money that people donated at goodwill to the foundations or something? No, the Gates Foundation money is from Bill Gates's personal fortune. It has over $100 billion in it. It also has billions from Warren Buffett. This is all investment capital. It's all money which is seeking a commercial return.

The issue is that it was supposed to be deployed to provide demonstrable social improvements as well as a profit. And in some cases, and it didn't. And as a result of that, there's a huge loss of trust in the possibility that money can be moved around the world and deployed in a way that is useful. And so how much total does this guy run off with? So allegedly almost as much as $800 million. Wow. If somebody just wants to send me a million, they can end poverty and also enrich the world.

I'm just saying. But I'm keeping it. I think that shows some of the genius of this man. The fact that he was able to go to some of the world's richest and smartest people and convince them to give him so much money. Like his story was very seductive, as Simon has said. Like if I went to you and tried to raise £100 from you, you probably wouldn't give me very much. I've already checked you. I'll give you a check. Well, can you please do that after we get off this?

But Arif in total managed to raise nearly $14 billion. And so how one can look at it is, if you look at like the Wolf of Wall Street, for instance, he managed to dupe fairly unsophisticated investors. They were normally you or me that were looking to make a bit of money with our pension, with our IRS thing, investing money personally. What Arif did, he went to literally people whose entire job is to invest money sensibly and to make good returns.

They didn't have hedge funds as investors, but lots of very sophisticated banks, like Bank of America, Goldman Sachs, lots of institutions that are very smart. They gave Arif money. They expected to make returns, and now some of the money has gone missing, at least according to the U.S. Department of Justice. This gives me a good idea because I've got that Moderna vaccine here. Let me call Bill, see if I can get him to pick up here. I'm just kidding.

This is crazy, man. That's a lot of money. If it hadn't been for this tipster tipping you guys off, would maybe this still be undercover of whatever? I imagine once the people started filing charges, something would would come out or technically the charges that are filed are because of you guys, right? It would have been hard for this not to have blown up in some way publicly because there was US government money invested. There was Bill Gates's Charitable Foundation money invested. And there were US pension fund money.

So American firefighters, policemen, teachers, their money was invested in abroad. And that's why these charges have been levelled at the firm. US authorities take this very seriously. It is possible that if we hadn't been tipped off, it might have imploded in a more secretive way and people wouldn't really have understood exactly what was going on. But we've spent the best part of 2018 working on this. It took us six months from the tip-off to finally get someone to hand over documents, bank statements from within a barge, which proved the theft and the fraud. So it is possible that if we hadn't been working so hard, it would have been a bit more of a quiet story and he won the support of president obama's administration and the chief of the british government that compared him to tom cruise and mission impossible how did that work he

he got in with everybody i think that's really part of the part of the again the genius of him like i just said i use the example of myself trying to raise money from yourself so how was able to immerse himself within these financial institutions and with governments was because he was incredibly smart like the message that he was you know giving was obviously a very attractive one so the u.s government like opit the overseas private investment corps they saw aref as a means of being able to tackle extremism in the Middle East. They launched this big campaign during the Obama administration to tackle extremism and terrorism by helping build the economy in countries overseas in the Middle East. And so how they thought they could do that was by investing money, creating there wouldn't be so much youth unemployment and so all the people that would maybe have gone and you know joined isis would actually have jobs

working at software companies for instance and so aref positioned himself strategically as a kind of conduit for money from the u.s government to go to these areas which obviously had some social issues going on there. And so they saw him as a foreign policy tool, effectively. And so in total, I think they pledged, the U.S. government specifically pledged, around $500 million to this man. Yeah, and it didn't end so well, but it was a nice idea. So you guys chose the title, The Key Man. Was there a reason you chose The Key Man as the title? Yeah, so there's two reasons. The Key Man is actually a term used in private equity for the heads of private equity firms. If The Key Man or The Key Woman leaves the firm, then investors can be entitled to have their money back because it means the firm doesn't

have a future. So there's a term used in private equity. Also, because of Arif's pitch, which is, I will make you money and end poverty, it seemed to elevate him as a key man in human affairs. He was at the centre of an incredibly influential political and financial network. He was trying to hire John Kerry to join his firm after John Kerry that if we could just get everyone jobs in the middle, they quit. They joined. Getting blown up is about the only job over there sometimes in Palestine, which is sad. And they have people promising all sorts of stuff. But if they had solid jobs, there would be hopefully some stability. This is pretty extraordinary.

What are some shocking things or maybe do you want to tease out some things in the book that readers want to look forward to when they pick it up? Sure. So when Arif was finally arrested, Heathrow Airport in London in April 2018, he was carrying four passports. Wow. Two of them were Pakistani passports. One, it was a St. Kitts and Nevis passport. And the fourth one was the most interesting one. It was an Interpol passport. So Interpol is the global police organization that

connects police authorities in every country. And Arif had an Interpol passport because he was on the board of the Interpol Foundation, which was supposed to raise money for Interpol. And when the policeman stepped forward to say that he was under arrest, he said to the policeman, you can't arrest me because there's not a red notice out from me. A red notice is an Interpol warrant to alert people that a person is wanted. And he said he checked with Interpol before getting on the plane, whether or not there was a red notice and there was not a red notice. And the policeman said to him, I don't need a red notice to arrest you. You're under arrest.

Nice try for diplomatic community huh yeah there were we had sources were telling us that he had been trying to get a position within the pakistan government which may have afforded him immunity but he didn't get it he has you know been a funder of senior politicians in Pakistan, the current Prime Minister of Pakistan, Imran Khan, his second wife, his former wife, wrote in her autobiography that Imran told her that Arif was one of his main political funders. And in our reporting, we've shown that he was attempting to make a payment or had considered making a payment of $20 million to another prime minister of Pakistan as he was trying to sell a major asset in the country. So he was extremely well networked in the global financial and political elite where does his where does his uh theft come out on the list of people who've debunked investors and stuff i just pulled up bernie madoff and i guess his was about 65 70 billion dollars so where does this guy fall in the in the list of big world investor threat uh

ripoffs he's up there abraj managed 14 billion dollars i don't actually have a league table of the biggest thefts in the world but this is a big one those are the next 10 books or whatever that's that's a good that's a good that would be a good league table to compile giving me an idea that yeah do they is there any chance these guys are going to get their money back or some of it or is it all did did somebody just go have too much fun with it so the abraj managed a number of funds and there were investments in companies so it wasn't as if no investments were made there were investments made and some of those funds they're going to a fair amount of their money back yeah of the 780 million dollars that was transferred to to arif 385 million dollars is still missing according to the

liquidators of the firm have they extradited him to the america yet or is he still in london he's still in london i think he's got one more appeal to the to the high court in the uk before he will be but the home secretary in the uk has approved his extradition so the us is going to take precedent on the charges then the us made the charges the uk arrested him okay on behalf of the us um and we're not eventually there should be a trial in New York. We don't know when that is because we don't know if and when he will finally be extradited. Could be next year, could be the year after. Theranos, Elizabeth Holmes trial is taking a long time to unfold as well.

That's a deal too that I remember watching the whole thing come around. And you saw, I think it was a George Schultz or there was somebody that really validated that, that was a politician and a money guy. Yeah, it was Schultz. So it was George Schultz, yeah. And they brought in all the power guys. And I think, wasn't Prince in there? It was the Betsy DeVos family.

They were in that thing too. Ruth Mudd was a bigger investor, I think investor i think in town yeah i think they got they were on the hook for i don't know it was 100 million or maybe it was 100 million total that she ripped off or 100 billion or i don't know these are check numbers way out of my league that's a part of the secret to succeeding at least temporarily in these situations, is association with famous and apparently reputable people is very important. So Arif would tell people, I'm on the board of Interpol, and I'm a well-networked person, you can trust me. He had Bill Gates as an investor in his fund, he had Bank of America. So people took comfort from that.

They would say, oh, Bill Gates is an investor in a branch, so it must be okay. There's an element of confidence trick in that. And you can build and build by using that technique until it all falls down. A big part of Arif's confidence trick as well was his philanthropy like Bill Gates and Warren Buffett have pledged to give away lots of their money Arif gave away he set up a charitable foundation which he pledged at least 100 million dollars of his own money and

I think that was like one thing and so he set up a charitable initiative with bill gates in pakistan and i think if someone is giving away that much money it's very difficult to dispute the fact that they would do that so if i didn't have a lot of money i wouldn't give away 100 million dollars of it so i think that probably brought a lot of comfort for people just his incredibly lavish and generous uh donations that he made to charity i've got a i've got 100 million dollars i'm giving away it's just off screen right here it's right in this general area over here and i'm giving that away so bill call me bill call me you're not picking up how much of this comes down to personality because it seems like these guys bernie made off there was a theranos the theranos woman had this air of she tried to take on the air of Steve Jobs. She wore the turtleneck and everything and had this weird sort of diet and stuff.

I remember reading it just going, this is cracked out. But people bought into it. And it sounds like this guy was pretty, had one hell of a personality in being able to swindle these folks. Yeah, he was, he's very charismatic. He's very articulate, very cultured, very intelligent. And actually, he did wear a black turtleneck at the final end of his extradition trial where the judge told him that he was going to be extradited. In your turtleneck, too.

People normally go one of two ways. Bernie Madoff was super secretive, never really did any press at all. Whereas Elizabeth Holmes went very much for, I'm going to get on stage in front of everyone, tell everyone what I'm doing. Arif was very much in the Elizabeth Holmes school. He was out there. So a good little story from the book is, whilst we were preparing to publish our first story,

and we contacted Abraj and the firm to let them know that we're preparing a story about Arif allegedly misusing Bill Gates' even though he knew and Bill Gates also knew that he had potentially taken hundreds of millions of dollars of investors' money. And that was one of the things that I always found amazing about people like Aref and Elizabeth Holmes is how they have the balls to get up on stage and you're in trouble and to just sit there so coolly and calmly and collectively and debate. And there's actually a point in the conversation of Gates where he actually almost lectures Bill Gates. And it is, it is watching that video whilst we knew,

or we had suspicions that something was going on. I just thought this guy really is a fascinating character. Definitely. I imagine any sort of long con or grift is you've got to have that charisma to fool people and probably part of a bit of a narcissistic personality. But yeah, it's interesting. Note to self, take Kara's charisma classes and also learn to speak. So this is quite interesting.

Do you see him basically going to speak so this is quite interesting do you do you see him basically going to jail this is locked down it's just a matter of going through the courts then is there any ambiguous nature to this that he might be able to find a way to wiggle off he's innocent until proven guilty in a court of law but there is plenty of evidence that wrongdoing took place at a barrage the department of Justice has indicted six former Abraj executives, including Arif. One of them has already pleaded guilty. And in addition to that, the Dubai financial regulator fined Abraj $315 million for misleading investors. So he's in a tight spot. He is resisting extradradition doesn't want to go to the u.s

so it's it but it's not our job to to predict what will happen in the justice system but he's in a tight spot it should be interesting anything more you guys want to tease out on the book to get people to pre-order that i think this is a story that that will recognize. It's a story of ambition and money and drive. And it's playing out all over the world. So it's a great storybook about private equity, Barbarians at the Gate, written by Wall Street Journal journalists 20, 30 years ago. This is a private equity story about a great charismatic character, about money, about ambition, and it's unfolding in Dubai, Pakistan, Ghana, in Africa, in London, in New York. So it will take the readers into new and fascinating places through a story that they will recognize and understand. In fact, we had Brian Burrell on the show for his new book, Forget the Alamo. Yeah, I listened to it. It was good.

Yeah, great guys. It was wild to have all three of them on screen and juggle the two. Man, I tell you, you want to get interesting comments on YouTube, you attack the Alamo in Texas. And that episode has seen some comments, let me tell you. So, guys, give us your plugs so people can order up the book and find you guys in the internet and get to know you better and get that book ordered up for its July 8th release. It's actually July the 6th in the U.S. Oh. HarperCollins is publishing in the U.S. July the 6th in the u.s uh harper collins is publishing in the u.s july the 6th okay uh it's available in all good bookstores and online it's actually july the 8th in the united kingdom penguin is the publisher ah so that's what happened i clicked the link it took

me to the uk version it does say amazon.co.uk here. So July 6th, guys, you can get it before the people in England. So just beat them and your book club to be the first on your block to see you read it. Do we get both you guys in for your plugs? Yeah, sure. I'm on Twitter at William underscore Louch, spelled L-O-U-C-H. And add me on LinkedIn if you ever want to talk about anything interesting that's going on in the world of finance. There you guys go. Thank you guys for spending some time with us and coming on the show. Thanks for having us, Chris. Thanks very much. Thank you. And also go order The Key

Man, How the Global Elite Was Duped by a Capitalist Fairy Tale. This is just amazing to me. You think about all this wasted money and then, of course, none of this goes to help poverty at all. It's just been thrown out the window, really, and cooked and burned or whatever they can't claw back. It's a crazy story, man. Meanwhile, most of us go down to the bank and say, hey, can you loan us 50 bucks? And they're like, yeah, no. But yeah, if anybody doesn't need any money from me, if you take a check, that's fine. Anyway, guys, we certainly appreciate you guys tuning in. Thanks for being here.

Thanks to our live audience for saying hello as we go along. Go to goodreads.com forward slash Chris Voss, seeing everything we're reading and reviewing over there. Also go to, let's see, youtube.com forward slash Chris Voss, and all of our groups we have on LinkedIn, Facebook, Twitter, all those different places you can see where we're at with the show thanks for everyone for tuning in and we'll see you guys next time