Abraaj founder may face international arrest order as bad cheque sentence looms

A Sharjah court is expected to issue a judgment in second bounced cheque case on August 26, lawyers say

Arif Naqvi, chief executive officer of Abraaj Capital Ltd., pauses during a Bloomberg Television interview in London, U.K., on Monday, Jan. 18, 2016. Brent crude fell to a 12-year low in London, briefly dipping below $28 a barrel, after the lifting of international sanctions on Iran paved the way for increased supply amid a global glut. Photographer: Luke MacGregor/Bloomberg *** Local Caption *** Arif Naqvi
Powered by automated translation

Arif Naqvi, founder of embattled private-equity firm Abraaj Group, may face an international arrest warrant when a Sharjah court issues a sentence on August 26 in a criminal case against him for writing a bad cheque.

The case is over a bounced cheque written to Hamid Jafar, a founding shareholder in Abraaj, worth Dh798 million, jointly signed by Mr Naqvi and a fellow executive.

Mr Naqvi was not present at the court hearing on Tuesday and a judgment is expected to be issued on August 26, according to Zafer Oghli, partner at law firm Tamimi & Co, which represents Mr Jafar.

There is a “high possibility” that the law firm will request the public prosecutor to issue an international arrest order for Mr Naqvi, who is currently outside the UAE, depending on the sentence issued, Mr Oghli said.

"If the judgment is imprisonment, then it's not just a piece of paper, there's a procedure to be followed; if he does not show up or appeal, then we will ask for an arrest order not only in the UAE but internationally," Mr Oghli told The National. "No one is far from the hand of justice."

The punishment for issuing a bounced cheque under UAE law can include imprisonment or a fine. Mr Naqvi, who is currently outside the UAE but is a Dubai resident, was not expected to attend the August 14 hearing.

The Sharjah court’s decision to reserve judgement until August 26 was expected, Mr Naqvi’s lawyer Habib Al Mulla, executive chairman of Habib Al Mulla Baker Mackenzie, said.


Read more:


“Negotiations are still ongoing between the parties and hopefully they will reach a settlement before the next hearing,” Mr Al Mulla said in an email.

This is the second case of a bad-cheque allegation to be brought against Mr Naqvi. Last month, a Sharjah court dismissed a bounced cheque case brought against Mr Naqvi by Mr Jafar after the parties reached a provisional out-of-court settlement, according to their lawyers.

That first case related to a cheque for Dh177.1 million ($48m), jointly signed by Mr Naqvi and an Abraaj executive Rafique Lakhani, and was made out to Mr Jafar. The cheque was used as partial security for around US$300m (Dh1,102) of loans made to Abraaj by Mr Jafar.

The new case, and the possibility of an international arrest order, are the latest twists in an ongoing saga involving Dubai-based Abraaj, the private equity firm that is accused of mismanaging investors’ money in a $1 billion healthcare fund. Abraaj has denied the allegations.

Once the biggest private equity firm in the Middle East and North Africa region with about $14bn in assets under management, Abraaj is undergoing a court-supervised restructuring in the Cayman Islands as it seeks a resolution with creditors.

The company is spiralling towards collapse after months of turmoil in a row with investors over the use of their money.

Over the last few weeks, a growing list of the UAE’s publicly-listed companies have disclosed their degree of exposure to Abraaj.

Potential buyers are being sought for Abraaj's investment management business, with Kuwait’s Agility disclosing its interest in a statement to the bourse.

Mr Naqvi resigned from the board of Air Arabia, Sharjah's low-cost carrier, the airline said August 12 in a regulatory filing with the Dubai Financial Market where its shares are traded. Abraaj owns an undisclosed stake in Air Arabia, according to the private equity company’s website. At the height of the Middle East's aviation boom in 2007 and high oil prices, Abraaj had a 17 per cent stake in Air Arabia.