Ernst & Young (EY) has resigned as auditor of Finablr, citing concerns over corporate governance and the makeup of the board.
EY announced its decision in a statement to the London Stock Exchange (LSE) today. The statement says that there were “concerns arising out of recent events at the company and NMC Health plc…the composition of the board of the company, the adequacy of corporate governance concerns and the recent issues that have caused the company to commission an independent review of the company’s financial arrangements, including of related party transactions and on and off-balance-sheet debt.”
As the auditor, EY had called for alterations to be made at board level and LSE was intimated of resignations of non-executive directors Abdulrahman Basaddiq and Bassam Hage, effective March 27. However, EY said in the statement that this did not meet their requirements in full in the time allowed to them.
As per the statement, the auditor has also added that it has not made any “specific allegations or suspicions of wrongdoing, or of any actual or alleged instances of accounting, financial, governance or other irregularities”.
Earlier this month MIC Capital Partners – owned and managed by Mubadala Capital, a unit of Mubadala Investment Co – had acquired a 3.4 per cent stake in London-listed firm Finablr.
Finablr’s shares were suspended earlier with the company admitting that it might not be able to continue and that its chief executive would step down. This was followed by a statement in which the company announced that it has hired an accounting firm to oversee contingency planning in case of insolvency. Prior to that, the company confirmed that the Financial Conduct Authority (FCA) agreed to the temporary suspension of listing of the shares of Finablr PLC at the request of the company.
In addition, the board has been informed of the presence of about US$100m in cheques, dating from before Finablr’s May initial public offering that was used to benefit third parties.
Finablr, founded by disgraced UAE-based billionaire BR Shetty, has been battling problems with its Travelex business, first because of a ransomware attack last year and now with the coronavirus crisis. UAE Exchange, also owned by Finablr, temporarily suspended all new dealings in its UAE branches. Its sister concern NMC Health, also founded by Shetty, is already in deep financial crisis.
