The founder of Abraaj has been hit with another criminal case in the United Arab Emirates for allegedly issuing a $217m cheque with insufficient funds, as the private equity group struggles to effect a court-driven restructuring.

Hamid Jafar, a prominent businessman, has opened another bounced cheque case in Sharjah only two weeks after the apparent resolution of an earlier $48m case. The cheques relate to a $300m loan issued by Mr Jafar to Dubai-based Abraaj.

Habib al-Mulla, lawyer for Abraaj founder 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 United Arab Emirates — renews personal pressure on Mr Naqvi, who is outside the UAE.

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 $1bn healthcare fund. Abraaj 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 Mr Naqvi and Mr Jafar.

“The accused (Mr Naqvi) has already reneged on what was promised,” said Essam al-Tamimi, Mr Jafar’s lawyer. “There has been no settlement, and the matter is for the criminal court under UAE law.”

A person close to Mr Naqvi said both sides had disagreed over the assets’ value. Mr Naqvi, he added, wanted an independent audit of the assets whereas Mr Jafar wanted to use his own valuation.

Abraaj is undergoing a court-driven restructuring process after confidence collapsed in the private equity group. Unsecured creditors had filed to wind up Abraaj in the Cayman Islands, forcing the company to seek protection by filing for provisional liquidation.

Abraaj raised large amounts of debt last year to bolster its finances, including the short-term loan from Mr Jafar. For years, income had failed to cover costs.

Under provisional liquidators PwC and Deloitte, the holding company and its funds platform have been seeking to sell off assets to repay debts of about $1.1bn and cover staff severance packages.

Bids from companies such as Colony Capital and Cerberus Capital Management collapsed after resistance from some investors in Abraaj funds. Other offers have been received, including bids from US hedge fund York Capital Management and a unit of Abu Dhabi Financial Group.

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