Abraaj founder reaches out-of-court settlement over bounced cheque case

Arif Naqvi had faced criminal charges over a Dh798m cheque

The bounced cheque case is the second criminal case filed against Mr Naqvi by Mr Jafar in recent months on the same grounds.Sarah Dea / The National
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Arif Naqvi, the founder of embattled private equity firm Abraaj Goup, reached an out-of-court settlement with a founding shareholder, Hamid Jafar, in regards to a case over a Dh798 million bounced cheque, lawyers said on Tuesday.

"The parties have reached a full settlement on all disputes with Mr Jafar," Habib Al Mulla, executive chairman of Baker McKenzie Habib Al Mulla, which is acting on behalf of Mr Naqvi. "Under UAE Criminal Law charges based on bounced cheques get extinguished once parties reach a settlement. Accordingly, the parties will apply to the court and the public prosecution to withdraw the cases brought on the bounced cheques."

Mr Al Mulla told The National an arrest warrant for Mr Naqvi has been lifted. Zafer Oghli, a partner with Al Tamimi & Company and attorney to Mr Hamid Jafar also confirmed the deal.

"The parties have agreed terms for the resolution of the current proceedings before the Sharjah Criminal Court relating to a dishonoured cheque issued by Mr Arif Naqvi and another individual," said Mr Oghli. "As a result, all criminal proceedings relating to this case have been discontinued.”

Earlier on Tuesday, Reuters and Bloomberg cited Sharjah court documents from August 26 saying Mr Naqvi and Abraaj executive Rafique Lakhani had been sentenced to three years in prison for issuing a cheque without sufficient funds. The punishment for issuing a bounced cheque under UAE law can be jail or a fine.

The bounced cheque case is the second criminal case filed against Mr Naqvi by Mr Jafar in recent months on the grounds of same offence.


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The court in Sharjah dismissed the first case in July, which related to a cheque for Dh177.1m signed by Mr Naqvi and Mr Lakhani that was made out to Mr Jafar. The cheque was used as partial security for around $300m of loans made to Abraaj by Mr Jafar.

The case is the latest blow to private equity firm Abraaj, which is accused of mismanaging investors' money in a $1 billion healthcare fund. Abraaj, once one of the most influential emerging markets private equity firms that managed nearly $14bn in assets, has denied the allegations. The company has faced a liquidity crisis since the allegations became public earlier in the year and is undergoing a court-supervised restructure in the Cayman Islands.

Earlier this month, the Dubai International Financial Centre Courts appointed joint provisional liquidators to oversee the winding up Abraaj's Dubai entity.

The emirate's financial services regulator also said it had stopped the group from initiating new work or moving money to other entities.

David Soden and Phil Bowers from Deloitte were appointed as joint provisional liquidators by DIFC Courts following a winding up application by Abraaj Capital on August 1, both the DFSA and documents from DIFC Courts said earlier this month.