Abraaj founder faces arrest
dubai — Arif Naqvi, founder of Abraaj Group, is facing a criminal case for bounced cheques and an arrest warrant has been issued by a UAE court against the head of the largest fund manager in the Middle East.
The arrest warrant has been issued by a Sharjah court in absentia as Naqvi is travelling outside the UAE. A decision by the court will be announced on Thursday. Media reports give different values of bad cheques ranging from $48 million to $200 million.
dubai — Arif Naqvi, founder of the embattled Abraaj Group, is facing a criminal case for bounced cheques. An arrest warrant has been issued by a UAE court against the head of the largest fund manager in the Middle East.
The arrest warrant has been issued by a Sharjah court in absentia as Naqvi is travelling outside the UAE. A decision by the court will be announced tomorrow (Thursday, June 28).
According to court documents, the cheques were issued as a security for a loan of about $200 million (Dh734 million) given to Abraaj and $100 million to Naqvi by the UAE’s Jafar family, Bloomberg said, quoting Dr. Habib Al Mulla, executive chairman of Baker McKenzie Habib Al Mulla, Naqvi’s lawyer.
However, other reports said the bad cheques were valued at $48 million.
A statement by Abraaj sent to Khaleej Times confirmed that a loan was granted and security provided in a pure commercial transaction.
“Partial repayment of the loan has been made and settlement discussions are ongoing with the intent to arrive at a satisfactory solution for all parties. It should be noted that the cheques were provided as part of a security package and as such should not have been
submitted to a criminal court,” the statement said.
Writing in Khaleej Times on Monday, Matein Khaled, an equities strategist and fund manager, estimated that approximately $3 billion to $4 billion would be wiped out from Gulf financial wealth in the defacto bankruptcy of Abraaj Group.
Facing a liquidity crunch, the region’s largest private equity fund has been in trouble since early this year when some of its investors, including Bill & Melinda Gates Foundation, commissioned an audit to probe the alleged misuse of the funds.
Since it was founded in 2002, Naqvi had built a portfolio of $14 billion (Dh51.4 billion) before the collapse of the region’s top equity firm.
On Monday, two co-CEOs of the group, Omar Lodhi and Selcuk Yorgancioglu, resigned from the board of Abraaj Investment Management Ltd, which is the main fund management arm of the group. However, they will continue to work as co-CEOs of the company. It has also reportedly sold its stake in Middlesex University’s Dubai campus to Amanat Holdings for $100 million (Dh367 million).
Along with Naqvi, another Abraaj director Muhammed Rafique Lakhani also reportedly faces the lawsuit for bad cheques.
“Abraaj is surprised by the excessive media interest which comes at a sensitive moment in its restructuring efforts and sale of the Group’s regional fund business to Colony Capital. We believe deliberate efforts are being taken to destabilise the positive developments that the Group and its joint provisional liquidators have been working very hard to secure,” the company’s statement said.
It should be noted that the cheques were provided as part of a security package and as such should not have been submitted to a criminal court Abraaj Group