August 1, 2018 / 5:57 AM / 3 months ago

Founder of Middle East's Abraaj faces fresh criminal action

DUBAI/ABU DHABI (Reuters) - Arif Naqvi, the founder of Abraaj, the Middle East’s largest private equity firm, is facing fresh criminal charges over accusations of issuing a cheque without sufficient funds, lawyers said.

The case brought by Hamid Jafar, another founding shareholder in United Arab Emirates-based Abraaj, comes as the company’s provisional liquidators seek to sell its investment management business.

The claim, which relates to a bounced cheque for 798 million dirhams ($217.3 million), is set to be heard by a Sharjah court on August 14, said Habib al-Mulla, a lawyer for Naqvi.

The renewed legal action follows a dismissal two weeks ago by the same court of a separate claim brought by Jafar against Naqvi for a cheque of 177.1 million dirhams alleged to have bounced.

That case was dismissed after both parties reached an interim settlement on that cheque, as well as further debt owed to Jafar, for a total of about $300 million.

“The accused has already reneged on what was promised,” Essam al Tamimi, Jafar’s lawyer, said in a statement. “There has been no settlement, and the matter is for the criminal court under UAE law.”

Al-Mulla said the details of the settlement were “pending”.

“Once again, the criminal proceedings are being used to exercise pressure for better settlement terms,” he added in an emailed response to questions from Reuters.

Buyers vying for part or all of Abraaj Investment Management include Kuwait’s Agility U.S.-based York Capital Management and Abu Dhabi Financial Group (ADFG).

Abraaj filed for provisional liquidation in the Cayman Islands in June after months of turmoil over a row with investors over the use of their money in a $1-billion healthcare fund. Abraaj has denied it misused money.

Editing by Clarence Fernandez

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