Dubai: A Sharjah court will hear a bounced cheque case against Arif Naqvi, founder of beleaguered private equity firm Abraaj on Sunday.
The court which heard the case on August 14 had reserved its judgement to August 26.
This is second such case against Naqvi to be heard in a court in the UAE. The case relates to a cheque worth $217 million (Dh798 million) issued by Naqvi to Sharjah-based Crescent Group founder Hamid Jafar.
The new case comes after a similar case relating to a bounced cheque of $300 million was settled out of court on July 15.
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.
Bouncing a cheque is a criminal offence in the UAE and Naqvi could face a jail term if found guilty.
Although Naqvi is out of the country, lawyers say they have the option to bring back Naqvi to the UAE to face justice.
While Naqvi is out of the country, it is not clear if the prosecution will go ahead with extradition.
“If the judgement is imprisonment, then it’s more than just a piece of paper, there’s a procedure and if he does not show up or appeal, then we will ask for an arrest order not only in the UAE but internationally,” Zafer Oghli, a lawyer with Al Tamimi & Co said on August 14. “No one is far from the hands of justice,” he said.
Faced with a liquidity crunch and court cases from investors and lenders, Abraaj, once the Middle East and North Africa (Mena) 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.
Abraaj Capital Limited (ACL), the only company belonging to the beleaguered Abraaj Group and regulated by the Dubai Financial Services Authority (DFSA), is going through a winding up process.
“The application seeks to appoint two individuals from Deloitte LLP as joint provisional liquidators of ACL pursuant to Article 59 of the DIFC Insolvency Law. The application was made by ACL with the authority of Abraaj Investment Management Limited (AIML), as the sole shareholder of ACL,” DFSA said in a statement.
DFSA said on August 15, 2018 that it had received notice of an order issued by the DIFC Courts appointing the two proposed individuals as joint provisional liquidators of ACL.
While Abraaj has an estimated debt burden of close to $1 billion, UAE-based companies have disclosed an estimated exposure of $2 billion in terms of loans to Abraaj and investments in Abraaj-managed funds.
Abraaj’s troubles began when investors, who include the Bill & Melinda Gates Foundation and the International Finance Corp, accused the buyout form of commingling and mishandling their funds in a $1 billion health care fund. Abraaj denies that it misused funds.
Although audits by Deloitte did not find evidence of embezzlement or misappropriation, they did, however, highlight a lack of adequate governance.
