Is this the end of the Abu

Dhabi group in Pakistan?

And who is to blame?
Corporate Finance
f2017-247
10/15/2019

Submitted by: MOHAMMAD NAYYAR MALIK

Contents
Summary ....................................................................................................................................................... 3
Whose fault is it- The Abu Dhabi Group Management, Pakistan Government, the Business Model or
Market Conditions?....................................................................................................................................... 4
What could have been done differently to avoid this problem?.................................................................. 4

2
Summary
The abu dhabi group which was firstly known as the dhabi group was founded by Sheikh Nahayaan, who
is the current Minister of Culture, Youth and Social Development in UAE. This group has invested in
different countries in different sector. The group wanted to invest in Pakistan so they hired Bahir Tahir a
former employee of BCCI (Bank of Credit and Commerce International) and gave him the position of CEO
in abu dhabhi group and later Bashir brother was also appointed because he was leading in banking
sector. Basher brought $3 billion of investment in Pakistan alone, whereas the rest of the world totaled
on $ 500 million. At the peak point, the group invested in different portfolios which include Bank
AlFalah, United Bank Ltd (sold soon after being bought), Warid, Wateen Telecom, KOR Standard Bank,
Raseen Technologies, Al Razi Healthcare, and other investments in the industrial, pharmaceutical and
consumer staples sectors. The beginning period of the group was a great success they even appointed
Adeel Bajwa who was a failed counselor when he was working for Salman Taseer one of MQM’s leaders
in London. As Adeel Bajwa turned out to be profitable for the company because he well manged the
telecom sector in Bangladesh and banking sector in Georgia , which gave hi the control over Pakistan
telecom sector. However, the downfall of this sector was started because many greater and better
service providers were entering and attracting the market towards them while the wateen was facing a
huge a loss due to there poor management and lacking in bringing new service technology and retaining
its customers due to which the sheikh was loosing confidence to invest more in this sector. The biggest
hurdle for the group was the growing competition by local firms. In 2011, Bahir Tahir and Pervaiz Shahid
resigned from wateen and warid, but they were also be blamed for some wrong doing and leasing there
property to bank AlFalah at high rates so they can make profit. Later, the sheikh appointed 4 member
group of European’s known as the Goa group to takeover as the head of company for a short period, so
they can have time to sell there shares in UBL remaining with only 5% which also removed sheikh from
the position of chairman in UBL. In the mean time Adeel Bajwa took the opportunity and became the
next CEO of the group that was upgrading warid service to 4g LTE Service which increased the growth
and the profit for the company. After becoming the CEO he also wanted to takeover bank AlFalah so he
started making changes from top management and introduce a new CEO to bank Mr. Nauman Ansari,
but it couldn’t stop the downfall of the bank and from being one of the top five banks of Pakistan it
declined and ranked at position 7th. On march 19t, Adeel Bajwa also resigned from the CEO of group as
he was alleged in charges for selling wateen group to his own company. After resignation the new CEO
of the company was Dominique Liana Russo and he formed a close relation with CM Usman Buzdar
which gave new and open investment opportunities to investors.

3
Whose fault is it- The Abu Dhabi Group Management, Pakistan
Government, the Business Model or Market Conditions?
The major cause of the failure of the group was the management of abu dhabi group as they were
choosing the wrong management continuously in company like wateen where no management was able
to bring change, and in alfalah where there is continuous struggling didn’t made any output. Interest in
investing in short term rather than long term investment was a wrong decision made by sheikh ,
whereas the CEO the group appointed was also cheating on the grou[ which resulted in declining of
there growth and profits, which also affected the economy rate of growth negatively.

What could have been done differently to avoid this problem?

As to avoid the fall, they should firstly solve the management issue because the success and growth of
the company is in the hands of good employees and honest leaders. Secondly, according to the case the
sheikh was easy to take the advantage by the two brothers so he should’ve also got involved in the
planning and controlling to avoid frauds which was done by those two brothers. The most important
reason was to bring new technology and bringing in new innovative and creative ideas because it was a
high tech industry sectors and they were lacking on new advanced technology.