The founder of the emerging markets private equity firm Abraaj can be extradited to the US to stand trial on allegations of a $250m fraud, a London court ruled on Thursday.

Arif Naqvi has been fighting an extradition request from the US government to stand trial on 16 counts of alleged fraud and money laundering allegations. He denies wrongdoing.

The collapse in 2018 of Abraaj, once one of the largest emerging markets investors, rattled the private equity industry. Abraaj had risen to become the region’s largest buyout fund when it crumbled under the weight of investor concerns about procedures at its $1bn healthcare fund.

In 2019, US prosecutors indicted Mr Naqvi and other former executives on charges of defrauding investors, which included the Bill & Melinda Gates Foundation. Prosecutors alleged that Mr Naqvi was the driving force behind a scheme that inflated the values of Abraaj’s funds and diverted millions of dollars for his personal benefit.

At a hearing at Westminster magistrates court on Thursday, Emma Arbuthnot, chief magistrate, ruled that the 60-year-old can be extradited to the US.

Mr Naqvi, a Pakistani national, is living in London after being granted bail when he lodged £15m security pending the extradition proceedings.

The collapse of the Dubai-based firm, which at its peak managed $14bn of assets, has damaged confidence in the broader regional private equity industry. The regulator of Dubai’s financial centre, where most of Abraaj’s operations were based, imposed record fines of about $315m on two of its entities in 2019 for misleading investors and misusing money. The region has also been hurt by the collapse of UK-listed NMC Health.

The ruling from the Westminster court contrasts with a number of other recent verdicts where British courts have blocked extraditions to the US on mental health grounds. This month, a judge blocked the extradition to the US of WikiLeaks founder Julian Assange on mental health grounds, and in 2018 the High Court similarly blocked the extradition of Lauri Love, a student alleged to have hacked into FBI computers.