Abraaj founder settles $300m bounced check case

Arif Naqvi, the founder and chief executive of the embattled Abraaj Group, has avoided a three-year prison sentence in the UAE with a last-minute deal. (File photos / Reuters)
Updated 28 August 2018
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Abraaj founder settles $300m bounced check case

DUBAI: Arif Naqvi, the founder and chief executive of the embattled Abraaj Group, has avoided a three-year prison sentence in the UAE with a last-minute deal struck with Hamid Jafar, the Sharjah based businessman, over $300 million of checks written by Naqvi and a lieutenant that were dishonored on presentation.
Lawyers for Naqvi, below, and Jafar issued statements yesterday that halted proceedings over the bounced checks — a criminal offense in the UAE — after talks in London agreed the transfer of certain assets from Naqvi to Jafar as part-payment of the debts, and an agreement to potentially pay more on the disposal of Abraaj assets.
Habib Al-Mulla, Naqvi’s lawyer and executive chairman of the law firm Baker & McKenzie Habib Al Mulla, said: “I am pleased to inform you that the parties have reached a full settlement on all disputes with Jafar. Under UAE criminal law, charges based on bounced checks get extinguished once parties reach a settlement. Accordingly, the parties will apply to the court and the public prosecution to withdraw the cases brought on the bounced checks.
“This is a good outcome for both parties to what in essence is a commercial dispute. We are pleased that the parties have settled their issues in a professional and business-oriented manner,” he added.
Zafer Ogli, partner of Al Tamimi & Co. and lawyer to Jafar, said: “The parties have agreed terms for the resolution of the current proceedings before the Sharjah criminal court relating to dishonored checks issued by Arif Naqvi and another individual. As a result, all criminal proceedings relating to this case have been discontinued.” Neither side gave details of the assets transferred to Jafar, but a source close to Naqvi — speaking on condition of anonymity — told Arab News that they mainly comprised real estate assets. Naqvi has significant property investments in London, the English Home Counties, and France, as well as in the UAE.
Naqvi has also agreed to make up the difference in any shortfall in value that might come Jafar’s way as a result of the ongoing sale of Abraaj assets, the source added. The Sharjah court, which last Sunday adjourned the case while talks continued to search for a resolution, had indicated it would impose a three year prison sentence on Naqvi and his co-signatory Rafiq Lakhani, an Abraaj executive.
Three checks to the value of about $300 million were given to Jafar as postdated payment for a loan to ease a funding problem at Abraaj. Once the leading private equity firm in emerging markets, Abraaj got into trouble when details surfaced of $200 million of funds that had been used for purposes other than what investors had intended.
Abraaj, which is in debt to the tune of more than $1 billion, is facing winding-up proceedings under the supervision of liquidators in the Cayman Islands, where its holding company is based.


Turkey sees lower growth, double-digit inflation in next years

Updated 53 min 28 sec ago
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Turkey sees lower growth, double-digit inflation in next years

  • The economy, which grew by 7.4 percent in 2017, would expand by just 3.8 percent in 2018 and then 2.3 percent in 2019
  • For 2020 and 2021, the forecasts were more optimistic, with growth seen at 3.5 percent

ISTANBUL: Turkey, which was last month buffeted by its worst currency crisis in recent years, on Thursday forecast sharply lower growth coupled with persistently high inflation in its new medium-term economic program.
The economy, which grew by 7.4 percent in 2017, would expand by just 3.8 percent in 2018 and then 2.3 percent in 2019, according to figures unveiled at a presentation in Istanbul by Finance Minister Berat Albayrak.
Inflation, meanwhile, would balloon to 20.8 percent at the end of 2018, moderating only slightly to 15.9 percent in 2019, the figures showed.
For 2020 and 2021, the forecasts were more optimistic, with growth seen at 3.5 percent and 5.0 percent, respectively, while inflation is seen moderating finally to a single digit 9.8 percent in 2020 and then a year later to 6.0 percent.
Albayrak, who is a son-in-law of President Recep Tayyip Erdogan, said what he termed the “New Economic Programme” would be based on the three principes of “balancing, discipline, and change.”
“Our aim is to write a new success story,” he said.
Greater economic prosperity has been one of the pillars of Erdogan’s popularity in his over 15 years in power, with the country seeing impressive growth rates in consecutive years.
However economists have warned that the all-out push for growth has led to a potentially dangerous overheating, with inflation rampant, the currency account deficit widening and doubts over the health of the banking system.
These fault lines were exposed in August when a diplomatic spat with the United States caused a crash in the value of the lira, sparking fears of a full-blown economic crisis.
Albayrak said that in 2019 projects whose tender had not been carried out would be “suspended” and vowed Turkey would create two million new job opportunities by 2021.
“We will realize a program to totally fight against inflation,” Albayrak said, highlighting food inflation which has particularly worried Turks.
Markets greeted his assessments as realistic but the lira was trading lightly lower against the dollar at 6.2, a loss of 0.8 percent in value on the day.