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CEO quits as Finablr suspends share listing

Finablr, the global platform for payments and foreign exchange, announced on Monday the resignation of Promoth Manghat as its chief executive officer, and said it would immediately commission a search for a new CEO.
The announcement coincided with the temporary suspension of listing of Finablr shares on the London Stock Exchange by the Financial Conduct Authority.
Manghat has also resigned from all other directorships and other offices of entities within the Finablr Group, said a company statement given to RNS, the news service of the LSE.
"The board has accepted his resignation and thanks Promoth for his contribution to the group over many years. Promoth has agreed to continue to support the group while the board finds a suitable successor.
The board will immediately commission a search for a new CEO, to be in place as soon possible. Further announcements will be made in due course," the statement said.
UAE Exchange transactions
Monday morning, Finablr's flagship UAE Exchange, the money remittance network, stopped accepting new transactions "effective immediately." The embattled firm, which has been beset by financial irregularity scandals related to its billionaire founder and chairman BR Shetty, sent a circular on Monday to all outlets to stop new transactions.
A spokesman of the exchange firm, a home-grown global brand from the UAE, told Khaleej Times that the move to temporarily suspend acceptance of new transactions at all outlets and also through online was due to certain "operational challenges." The exchange firm, which has more than 9,000 employees across 800 offices in over 40 countries, said all its customer service touchpoints and branches would remain open to support and attend to any queries customers may have. "We apologise to our customers for any inconvenience caused," the spokesperson said.
He said the suspension of transactions would be temporarily, and affirmed that everything would be back to normalcy soon.
"Due to certain operational challenges, we have temporarily suspended acceptance of any new transactions at the UAE Exchange branches and via our online channels. We are currently focused on processing all existing transactions as quickly as possible," the company said. "Our customer service touchpoints as well as UAE Exchange branches will remain open to support and attend to any queries customers may have. We apologise to our customers for any inconvenience caused," the spokesperson said.
Debt standstill
Finablr was founded by BR Shetty, who also founded troubled UAE hospital operator NMC Health, which earlier this month asked for an informal debt standstill to stabilise its finances. Finablr's turmoil started when its Travelex business was hit by a ransomware attack late last year. The company is also facing disruption to its business from the coronavirus crisis.
"On 12 March 2020, the company announced a number of factors that were placing significant constraints on the company's access to the daily liquidity it needs to manage its business effectively and its ability to negotiate longer term financing. Since that announcement, these constraints have become amplified and have 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.
However, the board is unable accurately to assess the financial position of the company, the statement added.
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.
Board to discuss cashflow
Finabalr said its board is in the process of discussing with an independent financial advisor its appointment to conduct a review of the company's debt and cashflow position and to support the management team in addressing its short- and longer-term financing needs.
"A further announcement will be made once the appointment has been finalised," Finablr said. The company also said its board was looking at urgent measures to restore confidence and stability across its stakeholders.
These include establishing a panel of "non-executive directors to carry out a comprehensive review of the company's liquidity and cashflow management functions, its financial and debt position, and its strategic options. Another move is the appointment of Kroll to carry out a more comprehensive review of related-party transactions and on and off-balance-sheet debt.
The committee will meet on a regular basis and work with the advisors, including those newly appointed advisors, said the statement. In order to strengthen the company's finance function, the board has decided that the company "would appoint a further accounting advisory team to support and strengthen its finance function with a focus on liquidity. A further announcement will be made once the appointment is confirmed," Finablr said. - issacjohn@khaleejtimes.om