Founder of Dubai's troubled Abraaj nears out-of-court settlement

Lawyer for Arif Naqvi says understanding on settlement reached in a case over bounced cheques for millions of dollars
Founder of Dubai's troubled Abraaj nears out-of-court settlement
Thu 05 Jul 2018 02:49 PM

A lawyer for the founder of embattled Dubai-based private equity group Abraaj said Thursday it is close to an out-of-court settlement in a case over bounced cheques for millions of dollars.

"Parties have reached an understanding last night. Now, they will put it in a document," said Arif Naqvi's lawyer, Habib al-Mulla.

"A provisional agreement has been reached ... over the main issues to repay the loan," Mulla, the chief executive of law firm Baker McKenzie Habib Al Mulla, told AFP.

Essam al-Tamimi, a lawyer for creditor United Arab Emirates businessman Hamid Jaafar, confirmed the negotiations but without giving details.

A UAE court on Thursday adjourned a ruling against the Pakistani founder of Abraaj, the region's largest private equity firm, to allow a settlement, sources familiar with the case said.

A ruling has been postponed until July 11 against Naqvi, who faces up to three years in jail for issuing three cheques worth $300 million without having sufficient funds in the bank.

Financier Naqvi, 57, is currently outside the UAE after the public prosecutor issued a warrant for his arrest.

The bounced cheques case is one of several woes facing Naqvi's group.

Founded in 2002 by Naqvi, Abraaj had nearly $14 billion of assets under management before being granted a court-supervised restructuring last month in the Cayman Islands, where it is registered, following allegations of the misuse of funds.

The Cayman Islands court appointed liquidators to oversee an "orderly restructuring" of the group.

Four key investors in a $1-billion healthcare fund managed by Abraaj, including Bill and Melinda Gates and a World Bank affiliate, have demanded an inquiry into allegations that money from the fund had been misused.

That in turn triggered investor demands for their funds to be returned. Abraaj had the funds to repay secured investors but could not repay unsecured investors.

The company categorically denied any wrongdoing.

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.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.