Arif Naqvi, the founder of Dubai investment group Abraaj, has been hit with another criminal case in the UAE for allegedly issuing a $217-million cheque with insufficient funds, as the private equity group struggles to effect a court-driven restructuring, said a report.

Hamid Jafar, a prominent businessman, has opened another bounced cheque case in Sharjah only two weeks after the apparent resolution of an earlier $48 million case, reported Financial Times.

The cheques relate to a $300 million loan issued by Jafar to Dubai-based Abraaj.

Habib Al Mulla, lawyer for Arif Naqvi, said the case was scheduled to be heard by a Sharjah court on August 14.

The revived threat of a jail sentence for failing to honour a debt - a criminal offence in the UAE - renews personal pressure on Naqvi, who is outside the UAE, stated the report.

Abraaj, once a significant force in emerging markets investing, has been moving towards collapse since investors complained that it had misused their money in its $1-billion healthcare fund. The UAE group has always denied any wrongdoing.
 
The previous cheque case was dismissed earlier in July after an interim settlement involving the transfer of assets was achieved between Naqvi and Jafar, reported FT.

However, Essam Al Tamimi, Jafar’s lawyer carified that there had been no settlement, and the matter was for the criminal court under UAE law.

“The accused (Naqvi) has already reneged on what was promised,” he stated.

Meanwhile, a person close to the Abraaj founder said both sides had disagreed over the assets’ value.

"Naqvi wanted an independent audit of the assets whereas Jafar wanted to use his own valuation," he explained.
 
Abraaj is undergoing a court-driven restructuring process after confidence collapsed in the private equity group, said the FT report.

Unsecured creditors had filed to wind up Abraaj in the Cayman Islands, forcing the company to seek protection by filing for provisional liquidation, it added.