Abraaj founder Arif Naqvi faces a criminal complaint in the UAE for issuing a cheque without sufficient funds, in the latest blow to the embattled private equity firm, according to a report in the Financial Times.
On Thursday, a Sharjah court is slated to determine whether Naqvi and a colleague, Muhammed Rafique Lakhani, issued the cheque without enough funds in the account.
Quoting a prosecution clerk, the Financial Times is reporting that the value of the claim is AED 177 million ($48.2 million). Citing an anonymous source familiar with the case, the newspaper said the bounced cheque was used as partial security for approximately $300 million in loans made by Abraaj to Hamid Jafar, the founder of the Sharjah-based Crescent Group.
Hamid Jafar’s son, Badr, is also on the board of Abraaj and has been contacted for comment by Arabian Business.
According to court documents seen by the newspaper, the prosecutor of the case has issued an arrest warrant against Naqvi, who is a Dubai resident but is currently in the UK.
Bounced cheques for amounts in excess of AED200,000 remain a criminal offence in the UAE and a conviction could mean a possible jail sentence for Naqvi.
“[Naqvi] is now wanted on criminal charges in the UAE and is refusing to come back and answer to them,” a person familiar with the case is quoted as saying.
Naqvi’s attorney, Habib al Mulla, is quoted as denying the allegations, saying that “the loan was given and the cheques were issued in a genuine commercial transactions and should be dealt with in a commercial manner.”
“Offers for payment and adequate securities were provided,” he added.
Al Mulla added that there is a “serious” discussion ongoing on repayment, and that he is confident that a solution can be done that is satisfactory to all parties involved, noting that Naqvi will not be in attendance at the hearing and that he had admitted that the cheque had not cleared.
Lawyers noted that Naqvi is likely to be tried in absentia.
Earlier in June, Abraaj filed for provisional liquidation and is using courts in the Cayman Islands to implement a restructuring plan for its estimated $1 billion in debts.
On Monday, it was announced that two co-chief executives of Abraaj Investment Management are stepping down from the company’s board as it begins the liquidation process and a partial sale of its fund management business to the New York-listed Colony Capital.
The two executives, Omar Lodhi and Selcuk Yorgancioglu, while no longer on the company’s board of directors, will still serve as co-chief executives.ny’s board of directors, will still serve as co-chief executives.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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