Eshraq Investments Launches Legal Action Over Goldilocks Dea
Eshraq Investments PJSC is taking significant legal steps following its 2022 acquisition of Goldilocks Investment Company Limited. The company has announced plans to pursue criminal and arbitration proceedings against former board members and selling parties involved in the transaction due to undisclosed pledged shares.
Legal Proceedings and Board Decisions
In a recent filing with the Abu Dhabi Securities Exchange, Eshraq revealed that its board approved the initiation of formal criminal proceedings against former board members who failed to disclose critical information during the General Assembly on April 28, 2022. This decision comes after the board discovered that some shares acquired in the Goldilocks deal were subject to undisclosed pledges.
During a board meeting held on November 5, 2025, the company also accepted the resignations of board members Jacques Elias Fakhouri and Maha Abdul Majeed Al Fahim, effective October 31. Eshraq plans to convene a General Assembly to update shareholders on the situation once it receives approval from the Securities and Commodities Authority.
Background on the Goldilocks Acquisition
Eshraq completed its acquisition of Goldilocks Investment Company Limited in 2022, aiming to diversify its portfolio and enhance profitability. As of now, Goldilocks is 99% owned by Eshraq and has fully exited its stake in GFH Financial Group, a Bahrain-based financial institution, as of April 2022.
Earlier this year, concerns were raised regarding the management and valuation practices of the Goldilocks Fund, which is managed by Shuaa GMC, a regulated entity under the Abu Dhabi Global Market (ADGM). Eshraq’s board expressed worries about changes in the fund’s valuation methods that resulted in a significant reduction of Dh497 million (approximately $135 million) in the value of underlying assets during the fourth quarter of 2024. The company reported a net loss of Dh679.4 million in 2024, compared to Dh545.1 million in 2023, primarily due to write-downs related to Goldilocks assets.
Forensic Review and Management Changes
In response to these issues, Eshraq has engaged legal and financial advisors to conduct a forensic review of the fund’s management and valuation practices. Additionally, the company’s legal counsel has reached out to Shuaa GMC to expedite the redemption of underlying investments and terminate the investment management agreement.
Eshraq’s board is chaired by Fahad Al Qassim, who also leads Salama Islamic Arab Insurance Company, where the Goldilocks Fund holds a 14% stake. The largest shareholder in Eshraq remains the Abu Dhabi Financial Group (ADFG), which owns 18.38% following a merger with Shuaa Capital in 2019. Inventive Investment Holding Limited has recently increased its stake in Eshraq to 10.3%.
The former chairman, Jassim AlSeddiqi, who was instrumental in the Goldilocks acquisition, resigned in October 2023 and subsequently sold his stake in the company. In August 2025, Eshraq announced the resignation of CEO Mohamed Al Sayed Al Hashmi, effective August 29. He will continue to support the company as an advisor to the board, while Tanvir Muhammad Haque has been appointed as Acting CEO and Chief Strategy Officer.
Future Outlook
The approval of legal proceedings signifies a critical step in Eshraq’s efforts to address governance issues stemming from the Goldilocks acquisition. The board emphasized that these measures are aimed at ensuring accountability, enhancing transparency, and protecting shareholder interests as the company reassesses its investment management arrangements.
FAQs
What prompted Eshraq Investments to take legal action?
Eshraq is pursuing legal action due to the discovery of undisclosed pledged shares related to its 2022 acquisition of Goldilocks Investment Company Limited, which were not disclosed during a key General Assembly meeting.
Who are the key individuals involved in the legal proceedings?
The legal action targets former board members who approved the acquisition without disclosing the pledged shares, as well as the selling parties involved in the transaction.
What steps is Eshraq taking to address the situation?
Eshraq has commissioned a forensic review of the Goldilocks Fund’s management and valuation practices and is pursuing legal and arbitration proceedings to ensure accountability and protect shareholder interests.
Conclusion
Eshraq Investments is actively addressing governance challenges related to its Goldilocks acquisition through legal and arbitration proceedings. The company aims to enhance transparency and accountability while safeguarding shareholder interests as it navigates this complex situation. Moving forward, Eshraq will keep stakeholders informed about developments and next steps in the process.
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