UAE court sentences Abraaj founder Arif Naqv to prison

Arif Naqvi, the founder of defunct Dubai-based private equity firm Abraaj Group, was sentenced in absentia to three years in prison by a court in the United Arab Emirates for a case involving low-cost carrier Air Arabia PJSC, people familiar with the matter said.

It’s unclear whether Naqvi will serve the sentence, given he’s in London awaiting a hearing over his potential extradition to the U.S. The sentencing comes a week after the Dubai financial center watchdog fined the collapsed buyout firm a record $315 million for misleading investors and misappropriating their funds.

Naqvi’s legal representative declined to comment, and Air Arabia representatives weren’t available to comment. Calls to the court in Sharjah, where Air Arabia filed the case, were unanswered.

Naqvi faces fraud allegations in the US. In London, he was granted conditional bail in May after paying the largest security bond ever ordered in the U.K. While he awaits his extradition hearing, he must wear an electronic tag and stay in his London home as part of the bail conditions. Naqvi maintains his innocence and expects to be cleared of any charges, his spokesman has previously said.

In February, the airline reported a full-year loss after booking impairments to cover its $336 million exposure to Abraaj. The buyout firm borrowed money from Air Arabia, on whose board Naqvi sat. The money was then used to cover shortfalls in one of the Abraaj funds and mislead investors, according to U.S. prosecutors.