A Sharjah court, which heard the cheque bounce against Arif Naqvi, founder of private equity company Abraaj and a colleague, Mohammad Rafique Lakhani, postponed the case on Thursday for further hearing to July 11.
The cheque bounce 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.
An adviser of Jafar, who attended the case, said this will give all parties additional time to try reach a viable negotiated settlement.
The court decision has come as a relief to embattled private equity firm that is facing various legal challenges including the cheque bounce case in the UAE.
Last month, the public prosecutor’s office in Sharjah issued an arrest warrant against Naqvi and Lakhani.
While Naqvi 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.
Sources on Thursday confirmed to Gulf News that negotiations are underway for a possible resolution of the matter, and the one-week adjournment will likely allow their completion.
Private equity industry sources said a negotiated settlement is in the interest of all parties. “Anyone going to jail is not going to solve the problems of creditors and investors. If there is a way forward to settle the disputes amicably, that will help the interests of private equity industry in the region as a whole,” said the CEO of a private equity company.
Faced with liquidity crunch and court cases from investors and lenders, Abraaj is in the process of liquidating its fund management business. The group is also in the process of selling some of its assets.
Earlier this week, Dubai-listed Amanat Holdings said that it has agreed to acquire Middlesex University’s campus in Dubai, which is partly owned by Abraaj. It is not clear at what valuation the sale is being finalised.
Last month Abraaj Group announced that it reached an agreement with New York-listed Colony Capital Inc for the sale of Abraaj’s Latin America, Sub Saharan Africa, North Africa and Turkey Funds management business and the Group’s Limited Partnership (LP) interests in the underlying funds.
Abraaj’s troubles began with investors including the Bill & Melinda Gates Foundation and the International Finance Corp making allegations of commingling and mishandling of their money in a $1 billion health care 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.