Settlement with founder of Crescent Group, Hamid Jafar, means Abraaj's Arif Naqvi will no longer face jail sentence over the $217m bounced cheque
Arif Naqvi, the founder of troubled Dubai-based buyout firm Abraaj, and Hamid Jafar, founder of Sharjah-based Crescent Group, have reached a settlement over the $217m (AED798m) bounced cheque case filed in a Sharjah Court, parties involved in the matter have told Arabian Business.
The bounced cheque was issued by Naqvi to Jafar, founder of Sharjah-based Crescent Group and also a founding shareholder in the private equity company.
The development comes after the parties involved agreed to an out of court settlement on July 15 over a previous bounced cheque worth $300 million.
“I am pleased to inform you that the parties have reached a full settlement on the issue of the amount outstanding to Mr. Jafar,” Naqvi’s lawyer Dr Habib Al Mulla told Arabian Business.
While bounced cheques are considered a criminal offense in the UAE, the settlement means Naqvi will no longer face the prospect of a jail sentence over the matter.
“Under UAE law, criminal 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,” said Al Mulla, who is chairman of law firm Baker McKenzie Habib Al Mulla.
A Sharjah court on Sunday had adjourned judgement regarding the case against Naqvi until Tuesday, August 28, to allow more time for out of court discussions.
“This is a good outcome for both parties to what is in essence a commercial dispute. We are pleased that the parties have settled their issues in professional and business oriented manner,” he added.
Abraaj, once the biggest private equity firm in MENA with $14 billion in assets under management, began a court-supervised restructuring in the Cayman Islands in June after it was accused of misusing investor capital, including that of the Bill and Melinda Gates Foundation, in a $1 billion healthcare fund.
Abraaj continues to deny any wrongdoing.
Investors last Friday announced the appointment of global consulting firm AlixPartners to oversee the separation of its fund management business from holding company Abraaj Group.
AlixPartners has been tasked with ensuring the long term success of the fund in delivering accessible, affordable and quality healthcare in developing countries.
In August, Cerberus Capital Management pulled out of bidding for Abraaj Group’s asset-management platform after its $25 million offer was rejected by investors of the private equity firm. The offer was the lowest among several bidders.