No jail time: Is the Abraaj cheque ordeal over?

August 29, 2018 10:37 am

According to Reuters, a UAE court sentenced the founder of troubled private equity firm Abraaj, Arif Naqvi, and another executive to three years in prison for issuing a cheque without sufficient funds, according to court documents and two court clerks on Tuesday.

It seems, however, that Naqvi has just barely dodged a jail sentence. This is his second bounced cheque case in 3 months.

READ: The DFSA hammers the final nail in the coffin for Abraaj

Is this the last Naqvi will hear of court cases?

Telling Reuters a settlement had been reached, Habib Al Mulla said: “Under UAE Criminal Law charges based on bounced cheques gets extinguished once parties reach a settlement. Accordingly, the parties will apply to the court and the public prosecution to withdraw the cases.”

The case in question relates to a bounced cheque worth $217 million. Naqvi was involved in another bounced cheque case last month, worth $48 million. Both cheques, and a third, were all issued to Hamid Jafar, Abraaj’s creditor. The total sum that was originally lent was $300 million, back in December 2017.

Despite supposedly coming to an out-of-court settlement last month, talks seem to have fell through, since soon after the first court case, Jafar filed for another.

Now, Naqvi must be hoping this is the last he will hear of Jafar’s cheques. He has been out of the country for a few months, and has since avoided custody after an arrest warrant was issued following the first case.

However, Abraaj’s troubles are far from over. A letter seen by Bloomberg News detailed that investors in a $1.6 billion Abraaj Group fund, the Private Equity Fund IV, said the company owes them at least $300 million. The disgruntled investors have also asked for the firm to be removed as the fund’s manager.

READ: $1bn healthcare fund separated: The source of Abraaj’s problems resolved?

Some good news

All of Abraaj’s troubles started back in February, when the firm was discovered to have mishandled the $1 billion Abraaj Group Healthcare Fund (AGHF). Last week, AlixPartners announced that investors had appointed their firm to oversee the separation of AGHF from the Abraaj Group.

With the issue of the AGHF to be resolved in the near future, Abraaj will have one less thing to worry about.

But, it might very well be too late, as the firm filed for liquidation earlier in the year, with buyers lining up to acquire the once great company.

READ: Has Abraaj truly mismanaged yet another fund?

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Mark Anthony Karam
By Mark Anthony Karam
Mark Anthony Karam has 3 years of experience in the field of visual and written media, having earned his Masters degree from the UK. You can get in touch with him here: [email protected]