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Lawyer: Dubai’s troubled Abraaj nears out-of-court settlement

A lawyer for the founder of embattled Dubai-based private equity group Abraaj said Thursday it is close to an out-of-court settlement in a case over bounced cheques for millions of dollars. “Parties have reached an understanding last night. Now, they will put it in a document,” said Arif Naqvi’s lawyer, Habib al-Mulla.

“A provisional agreement has been reached … over the main issues to repay the loan,” Mulla, the chief executive of law firm Baker McKenzie Habib Al Mulla, told AFP. Essam al-Tamimi, a lawyer for creditor United Arab Emirates businessman Hamid Jaafar, confirmed the negotiations but without giving details.

Financier Naqvi, 57, is currently outside the UAE after the public prosecutor issued a warrant for his arrest. The bounced cheques case is one of several woes facing Naqvi’s group.

Founded in 2002 by Naqvi, Abraaj had nearly $14 billion of assets under management before being granted a court-supervised restructuring last month in the Cayman Islands, where it is registered, following allegations of the misuse of funds.

The Cayman Islands court appointed liquidators to oversee an “orderly restructuring” of the group. Four key investors in a $1-billion healthcare fund managed by Abraaj, including Bill and Melinda Gates and a World Bank affiliate, have demanded an inquiry into allegations that money from the fund had been misused.

That in turn triggered investor demands for their funds to be returned. Abraaj had the funds to repay secured investors but could not repay unsecured investors. The company categorically denied any wrongdoing.

Hearing adjourned

It was reported earlier that a Sharjah court has adjourned until July 11 a case involving the founder of private equity firm Abraaj, Arif Naqvi, and another executive for issuing a cheque without sufficient funds, a lawyer involved in the case said on Thursday.

The Sharjah court case relates to a cheque for 177.1 million dirhams ($48 million), signed by Naqvi and a fellow executive, and written to Hamid Jafar, another founding shareholder in Dubai-based Abraaj, according to a prosecution document.

Khalid al-Bannay, from Al Tamimi & Co, the law firm representing Jafar, said the court has adjourned the case until July 11. Naqvi’s lawyer was not present at the hearing and could not be reached for immediate comment.

The court case in Sharjah, one of the United Arab Emirates, is another challenge for the founder of Abraaj, which is battling allegations that it misused investor money in a healthcare fund. The firm has denied these allegations.

Naqvi is the single biggest shareholder of Abraaj Holdings which owns the investment management business, partly being sold to US buyout firm Colony Capital.

Abraaj, the Middle East and North Africa’s biggest private equity firm, has filed for provisional liquidation in the Cayman Islands.

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