The latest in Abraaj Group’s court drama will likely resolve on Sunday, the 15th of July, the case judge said on Wednesday. But, what is waiting for Abraaj founder Arif Naqvi, who had failed to show up at the first hearing and is being accused of dodging payment?
A sticky situation
The case in question involves a bounced cheque that Naqvi had issued to creditor Hamid Jafar, founder of Crescent Group, a privately-owned investment management firm. Jafar loaned Abraaj $300m last December.
Now, the judge has adjourned the case once more to July 15, where a verdict is expected to be given. The case had already been adjourned until the 11th of July, to give the parties involved some time to reach an out-of-court settlement.
Naqvi is currently outside the country and was issued an arrest warrant following the cheque case. He has, however, failed to attend his hearing, with his lawyer Habib Al Mulla telling UAE daily the National that he had not seen a copy of the warrant or criminal complaint. Al Mulla said that Naqvi failed to show because “there is an arrest order against him.”
Reuters reports that on Wednesday, two sources involved in the case said that Jafar is expected to drop the case against Naqvi and his colleague.
One of the sources said the two parties were close to a settlement, the other did not comment on a possible settlement. They declined to be identified because of the sensitivity of the matter.
Yet, sources from both sides told Gulf News that they have not yet reached an agreement on the case. So, things are up in the air at the moment.
Both Arif Naqvi and executive Muhammad Rafique Lakhani are the accused in the case, having both signed the bounced cheque. Jafar claims that the money he loaned Abraaj was crucial in keeping the company afloat following recent legal and investor troubles.
Abraaj flies too close to the sun
Earlier in the year in February, Abraaj was suspected by 4 investors to have mishandled a $1 billion healthcare fund.
Following an investigation by KPMG that proved them innocent, the investors commissioned another audit by Deloitte, who this time found evidence of wrongdoing. While their results didn’t show any signs of intentional foul play, they did, however, bring to light the negligence and mismanagement of the fund that had occurred behind closed doors. The investigation found that the company has mishandled other accounts too and that the healthcare fund was not the first instance of financial mismanagement.
This latest court drama could be the nail in the coffin for the mega private equity firm, as their reputation and integrity have been under the probe over the past 5 months.
Even though Naqvi had stepped down from management, an indictment could likely ruin what’s left of the company’s image. Several corporations that have a stake in Abraaj could stand to lose big time on their investments, with several firms already such as the First Abu Dhabi Bank declaring exposure to the investment company.