Abraaj founder Naqvi faces second UAE court case over bounced cheque

Arif Naqvi, the founder of Dubai-based Abraaj Group, is now facing a second criminal case in the UAE for issuing a cheque without sufficient funds.

Hamid Jafar, the founder of Sharjah-based Crescent Group, has filed another case against Naqvi for a bounced cheque valued at Dhs798m ($217m).

A court hearing has been scheduled for the case on August 14, according to Naqvi’s lawyer Habib Al Mulla, the chairman of Habib Al Mulla Baker McKenzie.

“Once again, the criminal proceedings are being used to exercise pressure for better settlement terms,” he told Reuters.

The case comes less than two weeks after Jafar, who is also a founding shareholder in Abraaj, reached an out-of-court settlement with Naqvi for another case over a bounced cheque worth Dhs177.1m.

That cheque was jointly signed by Naqvi and Abraaj executive Muhammad Rafique Lakhani.

The Sharjah court ruled that the case had been dismissed after the claimant had waived his rights to pursue the claim.

Naqvi’s lawyer, Habib al-Mulla, told Reuters after the court’s announcement that a settlement had been reached regarding the cheque in question as well as further debt owed to Jafar for a total settlement of around $300m.

“As far as we are concerned it’s a done deal,” he said at the time.

Read more: Criminal case against Abraaj founder dismissed by UAE court

However, Essam al Tamimi, Jafar’s lawyer, told Reuters in a statement: “The accused has already reneged on what was promised. There has been no settlement, and the matter is for the criminal court under UAE law.”

The cases come even as the Middle East’s largest equity firm Abraaj is struggling to manage its debt and filed for provisional liquidation in the Cayman Islands in June.

The move came after a row with investors including the Bill & Melinda Gates Foundation and the International Finance Corp over the use of their money in a $1bn healthcare fund. Abraaj denies any wrongdoing.

Abraaj’s joint provisional liquidators, PwC and Deloitte, are seeking a buyer for the investment management unit of Abraaj as they seek to safeguard the funds and repay creditors.

One potential bidder, Cerberus Capital Management, has pulled out after not getting enough investor support for its offer, the joint provisional liquidators said.

That leaves US-based York Capital Management, Abu Dhabi Financial Group (ADFG) and Agility among the remaining interested parties, three of the sources told Reuters.

Also read: Kuwait’s Agility submitted bid for part of Abraaj’s investment business

With inputs from Reuters