A United Arab Emirates court Sunday dismissed a criminal case against the head of embattled Abraaj private equity group over bounced checks for millions of dollars, lawyers said.

 

But the lawyers disagreed over whether an-out-of court deal amounted to an interim or permanent settlement. 

 

"The case has ended. The court today issued a ruling dropping the criminal case" against Abraaj founder and defendant Arif Naqvi, defence lawyer Habib al-Mulla told AFP.

 

The case centers on bounced checks issued by Abraaj to UAE businessman Hamid Jaafar and the failure to repay Jaafar a $300 million (260 million euro) loan. 

 

A lawyer representing Jaafar confirmed the court had dismissed the criminal case, but said the parties had only reached an interim settlement.

 

"A final settlement has not been reached," Essam al-Tamimi told AFP in a text message.

 

The court in Sharjah, one of seven emirates in the UAE, had already delayed its ruling twice to allow time for a settlement.

 

Mulla said the settlement involves the full loan of $300 million.

 

Details of the deal and repayment procedures were not immediately available.

 

"This is a commercial issue and should have been dealt with on a commercial basis," Mulla said.

 

The public prosecutor had issued an arrest warrant for Pakistani Financier Naqvi -- who set up Abraaj in 2002 and saw the firm grow into the region's largest private equity group -- but he is outside the UAE.

 

Abraaj had nearly $14 billion of assets under management before allegations of misuse of funds provoked a scramble by investors to recover their money.

 

A court in the Cayman Islands  -- where Abraaj is registered -- appointed liquidators to oversee an "orderly restructuring" of the group last month.

 

Four key investors in a $1-billion healthcare fund managed by Abraaj, including Bill and Melinda Gates and a World Bank affiliate, have demanded an inquiry into the alleged misuse of money.

 

The company has categorically denied wrongdoing.