Abraaj founder Arif Naqvi faces new bounced cheque case

Dubai: Arif Naqvi, founder of the beleaguered private equity firm Abraaj, is facing a fresh charge of bounced cheque, according to lawyers close to the case.

Sharjah-based Crescent Group founder Hamid Jafar has filed a $217 million (Dh798m) bounced cheque case against Naqvi. The new case comes after a similar case relating to a cheque bounce of $300 million was settled out of court on July 15.

Last month, the public prosecutor’s office in Sharjah had issued an arrest warrant against Naqvi and the case was heard by a Sharjah court before it was dismissed following an ‘agreement’ reached by both parties to settle it out of court on mutually agreed terms.

While Naqvi is out of the country, he is represented by Dr Habib Al Mulla, executive chairman at Baker McKenzie Habib Al Mulla, Hamid Jafar is represented by Essam Al Tamimi, Senior Partner at Al Tamimi & Co.

The latest case comes following disputes on the terms of settlement agreed earlier, sources told Gulf News.

“The accused has already reneged on what was agreed. There has been no settlement, and now the matter is for the criminal court under the UAE,” Al Tamimi said.

 Abraaj did not offer any comment on the new case. 

Confirming the new development, Dr Al Mulla said the case relates to the second of three cheques Jafar submitted to the prosecution and it is for approximately Dh798 million.

“Usually when a settlement is reached on one of the series of cheques, the criminal action on all the cheques get extinguished. We can only assume than Jafar may have claimed that each cheque was issued as a different transaction,” said Dr Al Mulla.

The criminal case has been scheduled for hearing on August 14.

Sources in the legal fraternity said the new criminal case could trigger a fresh arrest warrant against Naqvi. Under the UAE laws cheque bounce is criminal offence and Naqvi could face jail term if convicted.

Faced with liquidity crunch and court cases from investors and lenders, Abraaj, the Middle East and North Africa region’s largest private equity company is in the process of liquidating its fund management business. The group is also in the process of selling some of its assets.

UAE based companies have disclosed this month a total of more than Dh2 billion exposure to Abraaj.

Abraaj’s troubles began with investors including the Bill & Melinda Gates Foundation and the International Finance Corp making allegations of comingling and mishandling of their money in a $1 billion healthcare fund. Abraaj denies misuse of funds.

Although audits by Deloitte did not find evidence of embezzlement or misappropriation, it highlighted a lack of adequate governance.

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