Abraaj’s founder faces possible jail time over fraud

Pakistan Today

In the latest blow to the embattled Abraaj, Arif Naqvi, who founded Middle East’s biggest private equity firm, now faces a criminal complaint in the UAE for issuing a cheque without sufficient funds reported Financial Times.
According to court documents, arrest warrants have been issued against Arif Naqvi who is currently residing in the UK, however, sources claim that Naqvi is refusing to travel back to Dubai to face the charges.
According to court documents seen by the newspaper, the prosecutor of the case has issued an arrest warrant against Naqvi, who is a Dubai resident but is currently in the UK.
On Thursday, a Sharjah court is scheduled to determine whether Naqvi and his colleague, Muhammed Rafique Lakhani, issued the cheque without enough funds in the account.
Quoting a prosecution clerk, Financial Times reported the value of the claim at around $48.2 million (AED 177 million). The report cited an anonymous source familiar with the case saying that the bounced cheque was used as partial security for approximately $300 million in loans made by Abraaj to Hamid Jafar, the founder of the Sharjah-based Crescent Group.
Hamid Jafar’s son, Badr, is also on the board of Abraaj and has been contacted for comment by Arabian Business.
According to court documents seen by the newspaper, the prosecutor of the case has issued an arrest warrant against Naqvi, who is a Dubai resident but is currently in the UK.
Bounced cheques for amounts in excess of AED200,000 remain a criminal offence in the UAE and a conviction could mean a possible jail sentence for Naqvi.
“[Naqvi] is now wanted on criminal charges in the UAE and is refusing to come back and answer to them,” a person familiar with the case is quoted as saying.
Naqvi’s attorney, Habibal-Mulla, is quoted as denying the allegations, saying that “the loan was given and the cheques were issued in genuine commercial transactions and should be dealt with in a commercial manner.”
“Offers for payment and adequate securities were provided,” he added.
Al Mulla added that there is a “serious” discussion ongoing on repayment and that he is confident that a solution can be done that is satisfactory to all parties involved, noting that Naqvi will not be in attendance at the hearing and that he had admitted that the cheque had not cleared.
Lawyers noted that Naqvi is likely to be tried in absentia.
Earlier in June, Abraaj filed for provisional liquidation and is using courts in the Cayman Islands to implement a restructuring plan for its estimated $1 billion in debts.
On Monday, it was announced that two co-chief executives of Abraaj Investment Management are stepping down from the company’s board as it begins the liquidation process and a partial sale of its fund management business to the New York-listed Colony Capital.
The two executives, Omar Lodhi and Selcuk Yorgancioglu, while no longer on the company’s board of directors, will still serve as co-chief executives.

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