Abraaj’s founder faces possible jail time over fraud

Naqvi's attorney desperately tries to concoct amicable solution for all stakeholders

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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.

3 COMMENTS

  1. I have served in Aman many year and the pioneers of aman.no doubt he is honest sincere and dedicated professional men.his views and ideas and goals are mind blowing.but the way he faces trouble now a days because of lack of interest and risky ideas from the close internal environment.

  2. Arif Naqvi is a Pakistani Patriot who has done wonders for Pakistan thru Aman Foundation. All Pakistanis must support this hero of Pakistan who is being wrongfully victimized like Agha Hassan Abedi was before in BCCI days.

    • I totally agree with you. Mr Arif Naqvi is being victimised because he rose from nowhere to a commanding position in the financial world. He was being seen as becoming the top controller of the financial world. Thus the powers knew he must be dealt with now as tomorrow will be too late. His case is similar to the sure shot winning horse who must be maimed before the race for once the race starts none of the running horses will be able to overtake! Like Mr Naqvi the late Agha H Abedi too was made to suffer when his bank started to dominate the financial world and till date they have not touched Citi Bank or Standard Chartered!
      About a decade back I read on website of LSE that since its inception LSE has never ever received such a large amount in donation as donated by Mr Arid Naqvi. Numerous institutions in Pakistan would say the same.
      Conclusively, I cannot comprehend Mr Arif Naqvi of any wrong doing!!!

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