THREAT OF ARREST WARRANT FOR ABRAAJ FOUNDER LEGAL
Court expected to issue judgment in second bounced cheque case this month against Arif Naqvi
Arif Naqvi, founder of embattled private equity company Abraaj Group, may face an international arrest warrant when a Sharjah court issues a sentence on August 26 in a criminal case against him for writing a bad cheque.
The criminal case is over a bounced cheque written to Hamid Jafar, a founding shareholder in Abraaj, worth Dh798 million, jointly signed by Mr Naqvi and a fellow executive.
Mr Naqvi was not present at the court hearing scheduled yesterday and a judgment is expected to be issued on August 26, according to Zafer Oghli, partner at law firm Tamimi & Co, which represents Mr Jafar.
There is a “high possibility” that the law firm will request the public prosecutor issue an international arrest order for Mr Naqvi – who is currently outside the UAE but is a Dubai resident – depending on the sentence issued, Mr Oghli said.
“If the judgment is imprisonment, then it’s not just a piece of paper, there’s a procedure to be followed,” Mr Oghli told
The National. “If he does not show up or appeal, then we will ask for an arrest order not only in the UAE but internationally. No one is far from the hand of justice.”
The punishment for issuing a bounced cheque under UAE law can include imprisonment or a fine.
The Sharjah court’s decision to reserve judgment until August 26 was expected, said Mr Naqvi’s lawyer Habib Al Mulla, executive chairman of Habib Al Mulla Baker Mackenzie.
“Negotiations are still ongoing between the parties and hopefully they will reach a settlement before the next hearing,” Mr Al Mulla said.
This is the second case of a bad cheque allegation to be brought against Mr Naqvi. Last month, a Sharjah court dismissed a case brought against Mr Naqvi by Mr Jafar after the parties reached a provisional out-of-court settlement, according to their lawyers.
That first case related to a cheque for Dh177.1 million ($48m), jointly signed by Mr Naqvi and Abraaj executive Rafique Lakhani, and was made out to Mr Jafar. The cheque was used as partial security for about $300m of loans made to Abraaj by Mr Jafar.
The new case, and the possibility of an international arrest order, are the latest twists in an ongoing saga involving Abraaj, based in Dubai, which is accused of mismanaging investors’ money in a $1 billion healthcare fund. Abraaj has denied the allegations.
Once the biggest private equity firm in the Middle East and North Africa region with about $14bn in assets under management, Abraaj is undergoing a court-supervised restructuring in the Cayman Islands as it seeks a resolution with creditors.
The company is spiralling towards collapse after months of turmoil in a row with investors over the use of their money.
Over the past few weeks, a growing number of the UAE’s publicly-listed companies have disclosed their degree of exposure to Abraaj.
Potential buyers are being sought for Abraaj’s investment management business, with Kuwait’s Agility disclosing its interest in a statement to the bourse.
Mr Naqvi resigned from the board of Air Arabia, Sharjah’s low-cost carrier, the airline said this week in a regulatory filing with the Dubai Financial Market, where its shares are traded. Abraaj owns an undisclosed stake in Air Arabia, according to the company’s website. At the height of the Middle East’s aviation boom in 2007 and high oil prices, Abraaj had a 17 per cent stake in the airline.