Source close to the matter says that the 'rapid erosion of trust' in the Abraaj founder 'is of great concern'
There are currently no ongoing negotiations to solve the legal woes of Abraaj founder Arif Naqvi, according to Essam Al-Tamimi, senior partner at Tamimi & Co, the law firm which submitted a multi-million dirham bounced cheque to authorities.
Naqvi now faces a criminal complaint in the UAE, and on Thursday a Sharjah court is expected to decide 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 AED177 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 to Abraaj by Hamid Jafar, the founder of the Sharjah-based Crescent Group.
In a statement sent to Arabian Business, Al-Tamimi said that “the issue is now a matter for the public prosecutor.”
“The accused has shown bad faith in signing cheques it is now clear he had no intention of honouring and is refusing to appear to face these criminal charges in the UAE,” he said. “I can also confirm there are no ongoing negotiations to resolve this matter.”
A source close to the matter told Arabian Business that “the rapid erosion of trust in Naqvi is of great concern.”
“Co-mingling of funds has already been established, but there are still major questions about how the financial gaps came to be, and at the level of Abraaj Holding.”
Al-Tamimi’s statement contradicts those of Abraaj, which on Tuesday said in a statement that it can “confirm that a loan was granted and security provided in a pure commercial transaction.”
“Partial repayment of the loan has been made and settlement discussions are ongoing with the intent to arrive at a satisfactory solution for all parties,” the statement noted. “It should be noted that the cheques were provided as part of a security package and as such should not have been submitted to a criminal court.”
In the statement, the company – which has field for provisional liquidation and is using courts in the Cayman Islands to implement a restructuring plan for its estimated $1 billion in debts – said it was surprised by the “excessive media interest” in the criminal complaint against Naqvi.
“We believe deliberate efforts are being taken to destabilise the positive developments that the Group and its Joint Provisional Liquidators have been working very hard to secure,” the statement said.