A long-awaited out-of-court settlement in a bounced cheque criminal case against the founder of private equity firm Abraaj Group dislodges concerns of complications in the firm's provisional liquidation, and should comfort other creditors, analysts said.
"The settlement clears things up a lot, because whenever there is a criminal accusation in the background it complicates restructuring plans and the sale of parts of the business in question," said Richard Segal, senior analyst at Manulife Asset Management.
The embattled buyout firm – once the Middle East's largest with almost $14 billion (Dh51.42bn) of assets under management at its peak – has faced a liquidity crisis since some investors accused it in February of mismanaging funds. Abraaj is undergoing a court-supervised restructuring in the Cayman Islands to repay an estimated $1bn of debt.
Liquidators are trying to sell various parts of Abraaj's business, including the funds management and investment management units, and in June reached an agreement to sell the latter to Colony Capital based in the US. The sale is yet to complete.
In parallel, Abraaj founder Arif Naqvi faced two consecutive criminal cases over bounced cheques, filed by one of his personal creditors Hamad Jafar – another founding shareholder of Abraaj – in June. Issuing a cheque with insufficient funds can be a criminal offence in the UAE and can elicit a jail sentence or hefty fine.
The first case related to a cheque for Dh177 million, jointly signed by Mr Naqvi and Abraaj executive Rafique Lakhani, and used as partial security for around Dh1.1bn of loans made to Abraaj by Mr Jafar.
Although a court in Sharjah dismissed the first case based on notice of a provisional settlement between Mr Naqvi and Mr Jafar, the claimant filed a second case in July, this time for Dh798m.
After two court adjournments, lawyers issued statements this week saying the settlement had been reached and the case withdrawn.
"Under UAE Criminal Law charges based on bounced cheques get extinguished once parties reach a settlement," Habib Al Mulla, executive chairman of Baker McKenzie Habib Al Mulla said.
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Read more:
Abraaj founder reaches out-of-court settlement over bounced cheque case
Dubai Financial Services Authority to investigate Abraaj mismanagement claims
String of UAE firms disclose exposure to Abraaj Group
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Mr Zafer Oghli, partner at Al Tamimi & Company, acting for Mr Jafar, said in a statement: “All criminal proceedings relating to this case have been discontinued.”
In both cases, the bounced cheque charges were brought against Mr Naqvi personally, not Abraaj Group, and no other creditor has publicly brought other charges against Abraaj or its founder. However, the practical and emotional significance of an "overhang" of a criminal case on the broader liquidation proceedings cannot be underestimated, said analysts.
“Clearly with this distraction gone, [Mr Naqvi] will have more mental space to deal with the restructuring – even if in theory he could still have influenced it before from behind the scenes,” Mr Segal said.
Having a personal case extinguished is positive, said Khalid Howladar, managing director and founder of Acreditus, “as an ongoing criminal case or conviction against the founder or shareholders would inhibit an efficient restructuring process if they were unable to participate due to court proceedings.
“The defendant would likely be focused on their personal court case versus on a distressed corporate restructuring. If convicted, there could be regulatory restrictions on the role they could take as managing director,” he said.
Mr Al Mulla said he had no information on what role in the restructuring Mr Naqvi could and could not have played had the criminal proceedings continued, and a spokesman for the joint provisional liquidators at Deloitte said news of the settlement “had no impact on the liquidation process”.
Mr Segal said that a background criminal accusation could prompt a prospective buyer of parts of Abraaj’s business to make additional requests or ask for terms unfavourable to the seller.
But he said the sales process appeared to be progressing well. “For the most part, interested parties have not dropped out, which is an encouraging sign and suggests they are being realistic about terms and pricing.”
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
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*Annual tuition fees covering the 2024/2025 academic year
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Results
6.30pm: Maiden Dh165,000 (Dirt) 1,600m
Winner: Celtic Prince, David Liska (jockey), Rashed Bouresly (trainer).
7.05pm: Conditions Dh240,000 (D) 1,600m
Winner: Commanding, Richard Mullen, Satish Seemar.
7.40pm: Handicap Dh190,000 (D) 2,000m
Winner: Grand Argentier, Pat Dobbs, Doug Watson.
8.15pm: Handicap Dh170,000 (D) 2,200m
Winner: Arch Gold, Sam Hitchcott, Doug Watson.
8.50pm: The Entisar Listed Dh265,000 (D) 2,000m
Winner: Military Law, Antonio Fresu, Musabah Al Muhairi.
9.25pm: The Garhoud Sprint Listed Dh265,000 (D) 1,200m
Winner: Ibn Malik, Dane O’Neill, Musabah Al Muhairi.
10pm: Handicap Dh185,000 (D) 1,400m
Winner: Midnight Sands, Pat Dobbs, Doug Watson.
The drill
Recharge as needed, says Mat Dryden: “We try to make it a rule that every two to three months, even if it’s for four days, we get away, get some time together, recharge, refresh.” The couple take an hour a day to check into their businesses and that’s it.
Stick to the schedule, says Mike Addo: “We have an entire wall known as ‘The Lab,’ covered with colour-coded Post-it notes dedicated to our joint weekly planner, content board, marketing strategy, trends, ideas and upcoming meetings.”
Be a team, suggests Addo: “When training together, you have to trust in each other’s abilities. Otherwise working out together very quickly becomes one person training the other.”
Pull your weight, says Thuymi Do: “To do what we do, there definitely can be no lazy member of the team.”
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Call the hotline on 0502955999 or send "thenational" to the following numbers:
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Why does a queen bee feast only on royal jelly?
Some facts about bees:
The queen bee eats only royal jelly, an extraordinary food created by worker bees so she lives much longer
The life cycle of a worker bee is from 40-60 days
A queen bee lives for 3-5 years
This allows her to lay millions of eggs and allows the continuity of the bee colony
About 20,000 honey bees and one queen populate each hive
Honey is packed with vital vitamins, minerals, enzymes, water and anti-oxidants.
Apart from honey, five other products are royal jelly, the special food bees feed their queen
Pollen is their protein source, a super food that is nutritious, rich in amino acids
Beewax is used to construct the combs. Due to its anti-fungal, anti-bacterial elements, it is used in skin treatments
Propolis, a resin-like material produced by bees is used to make hives. It has natural antibiotic qualities so works to sterilize hive, protects from disease, keeps their home free from germs. Also used to treat sores, infection, warts
Bee venom is used by bees to protect themselves. Has anti-inflammatory properties, sometimes used to relieve conditions such as rheumatoid arthritis, nerve and muscle pain
Honey, royal jelly, pollen have health enhancing qualities
The other three products are used for therapeutic purposes
Is beekeeping dangerous?
As long as you deal with bees gently, you will be safe, says Mohammed Al Najeh, who has worked with bees since he was a boy.
“The biggest mistake people make is they panic when they see a bee. They are small but smart creatures. If you move your hand quickly to hit the bees, this is an aggressive action and bees will defend themselves. They can sense the adrenalin in our body. But if we are calm, they are move away.”
Recycle Reuse Repurpose
New central waste facility on site at expo Dubai South area to handle estimated 173 tonne of waste generated daily by millions of visitors
Recyclables such as plastic, paper, glass will be collected from bins on the expo site and taken to the new expo Central Waste Facility on site
Organic waste will be processed at the new onsite Central Waste Facility, treated and converted into compost to be re-used to green the expo area
Of 173 tonnes of waste daily, an estimated 39 per cent will be recyclables, 48 per cent organic waste and 13 per cent general waste.
About 147 tonnes will be recycled and converted to new products at another existing facility in Ras Al Khor
Recycling at Ras Al Khor unit:
Plastic items to be converted to plastic bags and recycled
Paper pulp moulded products such as cup carriers, egg trays, seed pots, and food packaging trays
Glass waste into bowls, lights, candle holders, serving trays and coasters
Aim is for 85 per cent of waste from the site to be diverted from landfill
Match info
Liverpool 4
Salah (19'), Mane (45 2', 53'), Sturridge (87')
West Ham United 0
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