Dubai: A bounced cheque case against Arif Naqvi, the founder of Abraaj Capital, and colleague Mohammad Rafique Lakhani is heading to a negotiated settlement, according to a source close to the case.

The case relates to an approximately $300 million (Dh1.1 billion) loans from Hamid Jafar, the founder of the Sharjah-based Crescent Group, to Abraaj and Naqvi.

“Both the parties are working towards a mutually acceptable settlement leading to a likely withdrawal of the case when it comes up for next hearing on July 15. The legal formalities have to be worked out and presented to the courts. We don’t expect anything dramatic to happen before the next hearing,” said a source.

A Sharjah court on Wednesday adjourned the case to July 15.

During the last hearing on July 5, the court postponed the hearing to July 11, giving time to all parties and their lawyers to reach a negotiated settlement.

Despite, media reports last week that the parties have reached a settlement, sources from both sides told Gulf News that they are still working on the terms of the settlement.

Last week, after the court postponed the case, an adviser of Jafar who attended the case said this [postponing of the case] would give all parties additional time to try to reach a viable negotiated settlement.

While both the parties have confirmed ongoing negotiations, a source said: “No resolution so far, nothing is signed.”

More clarity

While Abraaj did not offer any comment on the postponed court hearing yesterday and the prospects of a negotiated settlement, a company source told Gulf News earlier this week that there will be more clarity on the case by next week.

Last month, the public prosecutor’s office in Sharjah issued an arrest warrant against Naqvi and Lakhani. While Naqvi is out of the country, he is represented by Dr Habib Al Mulla, executive chairman at Baker McKenzie Habib Al Mulla, Hamid Jafar is represented by Essam Al Tamimi, Senior Partner at Al Tamimi & Co.

Faced with a liquidity crunch and court cases from investors and lenders, Abraaj, the Middle East and North Africa region’s largest private equity company is in the process of liquidating its fund management business. The group is also in the process of selling some of its assets.

Abraaj’s troubles began with investors including the Bill & Melinda Gates Foundation and the International Finance Corp making allegations of comingling and mishandling of their money in a $1 billion health care fund. Abraaj denies the misuse of funds.

Although audits by Deloitte did not find evidence of embezzlement or misappropriation, it highlighted a lack of adequate governance.