Arif Naqvi, the founder of embattled Dubai-based private-equity firm Abraaj Group, and Crescent Group’s Hamid Jafar reached a settlement in a $217 million bounced-cheque case, Naqvi’s lawyer said two days after a court sentenced him to prison.
The announcement comes after a court in the United Arab Emirates sentenced Naqvi -- who is outside the country -- and another executive, Rafique Lakhani, to three years in jail and ordered them to pay court expenses, according to court documents seen by Bloomberg. The verdict was issued on Aug. 26, the documents show.
“Under U.A.E. criminal law, charges based on bounced cheques get extinguished once parties reach a settlement,” Habib Al Mulla, Naqvi’s lawyer and executive chairman of law firm Baker & McKenzie Habib Al Mulla, said in an email. “Accordingly, the parties will apply to the court and the public prosecution to withdraw the cases brought on the bounced cheques.”
Al Tamimi & Co., the law firm acting for Jafar, confirmed that the parties have reached a settlement. “As a result, all criminal proceedings relating to this case have been discontinued,” said Zafer Oghli, a partner at the firm.
Abraaj’s liquidators are trying to settle more than $1 billion of debt owed by the company, one of the most influential emerging-market investors until its dramatic collapse earlier this year. The private-equity firm is under court-supervised restructuring after it was found to have borrowed money from some of its own funds to pay operating expenses without investors’ consent, people with knowledge of the matter have said.
The company’s troubles emerged in February when some investors, including the Bill & Melinda Gates Foundation, commissioned an audit to investigate the alleged mismanagement of money in its health-care fund. Cerberus Capital Management, Colony Capital Crescent Capital and Agility Capital have all expressed interest in buying the embattled firm.