A Sharjah court on Sunday adjourned a hearing on a second criminal case over a bounced cheque against Arif Naqvi, the founder of Dubai-based private equity firm Abraaj Group.
The hearing has been adjourned until Tuesday, when the court is expected to issue judgment, lawyers told The National. The value of the bounced cheque is Dh798 million.
“There was no judgment issued today and the same [has been] adjourned until August 28,” said Zafir Oghli, partner and head of the Sharjah office at Tamimi & Co. The law firm is representing Hamid Jafar, the claimant and one of the founding shareholders in Abraaj Group.
“The hearing has been adjourned and the parties are still in discussion to reach a settlement out of court,” added Habib Al Mulla, executive chairman of Baker McKenzie Habib Al Mulla, which is acting for Mr Naqvi. The defendant did not attend court on Sunday, Mr Al Mulla said.
The case is the latest blow in a six-month saga involving private equity firm Abraaj, which is accused of mismanaging investors’ money in a $1 billion (Dh3.67bn) healthcare fund. Abraaj has denied the allegations, but has suffered a liquidity crisis since and is undergoing a court-supervised restructuring in the Cayman Islands.
The bounced cheque case is also the second criminal case filed against Mr Naqvi by Mr Jafar in recent months on the same grounds.
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Second bounced cheque case against Abraaj founder adjourned
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The court in Sharjah dismissed the first case in July, which related to a cheque for Dh177.1m signed by Mr Naqvi and Abraaj executive Rafique Lakhani and made out to Mr Jafar. The cheque was used as partial security for around $300m of loans made to Abraaj by Mr Jafar.
Lawyers acting for both parties said at the time they had reached a provisional out-of-court settlement.
The new case relates to a second cheque used by Mr Naqvi as partial security for the loans. However, Mr Al Mulla told The National in July the provisional settlement relates to the total outstanding amount. "There are fine details that are still pending and this is a way of exercising pressure to reach a settlement," he said.
However, Essam al Tamimi, a senior partner at Tamimi & Co told The National at the time there was no longer a settlement. "The accused has already reneged on what was promised," he said.
The punishment for issuing a bounced cheque under UAE law can be jail or a fine. Mr Naqvi is not expected to attend the adjourned hearing on Tuesday.