A Sharjah court will hear the case against Arif Naqvi, founder of private equity company Abraaj and a colleague, Mohammad Rafique Lakhani, on a cheque bounce case on Wednesday.
The court which heard the case on July 5 had postponed the hearing to July 11, giving time to all parties and their lawyers to reach a negotiated settlement.
Despite, media reports suggesting that the parties have reached a settlement, sources from both sides told Gulf News that they have not yet reached an agreement on the case.
The cheque bounce 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.
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 reach a viable negotiated settlement.
While both the parties have confirmed ongoing negotiations, at the time of going to the press, a source said: “No resolution so far, nothing is signed.”
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.
Legal and private equity circles suggested that Naqvi’s absence is hindering the signing of a legally binding agreement.
Abraaj sources too have hinted at further delays in a negotiated settlement. “Probably we will have more clarity by next week,” a source close to the cases said on Tuesday.
The court decision last week to postpone the cases by one week had come as a relief to embattled private equity firm that is facing various legal challenges including the cheque bounce case in the UAE. Court decision tomorrow will be crucial for the viability of a negotiated settlement.
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.
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.