Eshraq Investments PJSC has initiated legal proceedings to expedite the termination of its management agreement with Shuaa GMC, citing concerns over the valuation methodologies applied to the Goldilocks Fund.
The Abu Dhabi-listed firm reported a net loss of Dh677.37 million for 2024, an increase from Dh545.10 million in the previous year. This decline is primarily attributed to asset write-downs within the Goldilocks Fund, which Eshraq acquired through a share swap deal in 2022, Zawya reported.
Eshraq’s board has expressed concerns regarding changes in valuation methods that led to a Dh497 million decrease in the fund’s underlying assets during the fourth quarter of 2024. In response, the company has engaged legal counsel to facilitate the early termination of the investment management agreement with Shuaa GMC, the entity responsible for managing the fund.
Additionally, Eshraq has commissioned legal and financial advisors to conduct a forensic review of the management and valuation practices associated with the Goldilocks Fund. The findings of this review will be disclosed upon completion.
The Goldilocks Fund is managed by Shuaa GMC, a subsidiary of Dubai-listed Shuaa Capital. Despite the management agreement, Eshraq and Shuaa Capital operate as separate entities with independent boards.
Eshraq’s largest shareholder is Abu Dhabi Financial Group, which merged with Shuaa Capital in 2019 and currently holds an 18.38% stake in Eshraq. Recently, Inventive Investment Holding Limited increased its shareholding in Eshraq to 10.3%.
The move to terminate the agreement underscores Eshraq’s commitment to addressing valuation concerns and enhancing transparency in its investment management practices.
