By Muvija M and Saeed Azhar
(Reuters) – Payments group Finablr <FINF.L> on Monday expressed doubts about its ability to continue as a going concern and said its chief executive would step down.
Finablr was founded by BR Shetty, who also founded troubled UAE hospital operator NMC Health <NMC.L>, which earlier this month asked for an informal debt standstill to stabilize its finances.
Finablr’s troubles have followed problems at its Travelex business, which was hit by a ransomware attack late last year. The company is also facing disruption to its business from the coronavirus crisis.
“(Constraints) now reached a point where they are having a material adverse impact on the company’s operations, including resulting in the company no longer being able to provide certain payment processing services,” Finablr said.
“Board is unable accurately to assess the financial position of the company.”
Finablr said $100 million in cheques may have been used as security for financing arrangements for the benefit of third parties.
Last week, Finablr launched an internal investigation into its financial situation to address a liquidity squeeze.
Finablr said its board would immediately look for a replacement for Promoth Manghat who has stepped down as CEO.
The company also said its board was looking at urgent measures to restore confidence and stability across its stakeholders.
These include establishing a committee of independent non-executive directors to review of its liquidity and cashflow management functions, the appointment of Kroll to carry out a more comprehensive review of related-party transactions and on and off-balance-sheet debt.
Earlier in the day, Finablr’s shares were temporarily suspended, following a steep slide in the company’s stock price due to uncertainty over founder BR Shetty’s financial holdings.
The shares have fallen by more than 90% this year.
Separately, UAE Exchange, a Finablr subsidiary, has suspended all new transactions at UAE branches, it said in a statement on Monday.
“Due to certain operational challenges, we have temporarily suspended acceptance of any new transactions at UAE Exchange branches and via our online channels,” UAE Exchange said.
“We are currently focused on processing all existing transactions as quickly as possible.”
The firm, which has over 150 branches in the UAE, engages in money transfers, foreign exchange and payments services.
(Reporting by Muvija M in Bengaluru and Saeed Azhar in Dubai; editing by Patrick Graham/Saumyadeb Chakrabarty/Jane Merriman)