Dubai: A second cheque-bounce case against Arif Naqvi, founder of the beleaguered private equity firm Abraaj is settled on mutually agreed terms, lawyers of both parties told Gulf News on Tuesday.

The case relates to a cheque worth $217 million (Dh798 million) issued by Naqvi to Sharjah-based Crescent Group founder Hamid Jafar.

“I am pleased to inform you that the parties have reached a full settlement on all disputes with Mr Jafar. Under UAE Criminal Law, charges based on bounced-cheques gets 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 Dr Habib Al Mulla, executive chairman at Baker McKenzie Habib Al Mulla, who represents Naqvi.

Jafar is represented by Essam Al Tamimi, Senior Partner at Al Tamimi & Co.

Confirming that all criminal proceedings against Naqvi have been discontinued in this case, Zafer Oghli, Partner of Al Tamimi & Company and attorney to Hamid Jafar said in a statement: “The parties have agreed terms for the resolution of the current proceedings before the Sharjah Criminal Court relating to a dishonoured cheque issued by Mr Arif Naqvi and another individual. As a result, all criminal proceedings relating to this case have been discontinued.”

This is second such case on cheque bounce against Naqvi to be heard in a court in the UAE. The new case comes after a similar case relating to a cheque bounce of $300 million was settled on July 15.

“This is a good outcome for both parties to what is in essence a commercial dispute,” Al Mulla said, commenting on the decision to settle the new case.

Faced with liquidity crunch and court cases from investors and lenders, Abraaj, once 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 liquidating some of its assets. Naqvi is the single biggest shareholder of Abraaj Holdings, which owns the firm’s investment management business.

Abraaj Capital Limited (ACL), the only company belonging to Abraaj Group, regulated by the Dubai Financial Services Authority (DFSA) is undergoing winding up process.

ACL is part of the Abraaj Group and is a subsidiary of AIML and ultimately Abraaj Holdings Limited (AH). These two entities are both domiciled in the Cayman Islands and are undergoing liquidation under the supervision of Cayman Courts.

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 healthcare fund. Abraaj denies misuse of funds.

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