Finablr announces Board changes, Ernst & Young resigns as auditor of the company
Abdulrahman Basaddiq and Bassam Hage have resigned as directors of Finablr.
Provider of cross-border payments, FX and payment technology Finablr PLC (LON:FIN) today announces changes to its Board. Abdulrahman Basaddiq and Bassam Hage resigned as directors of the company effective March 27, 2020.
Mr Basaddiq had been appointed as a Non-Executive Director in April 2019 under the terms of the Relationship Agreement between Finablr and certain of its major shareholders, including Dr. B.R. Shetty, which permitted such shareholders to appoint a number of nominees to the Board. Mr Basaddiq was a Non-Executive Director but not considered by the Board to be independent as a result of his being appointed at the request of the Shetty family shareholders.
Mr Hage had served as an independent non-executive Director since his appointment in August 2019. His resignation on Friday followed a previous request from Ernst & Young LLP (“EY”) with respect to governance changes at the Board, including that Mr Hage step down from the Board as a result of possible perceptions that his position on the Audit Committee and the Board may, in the light of his previous career within the Ernst & Young group, prejudice EY’s ability to meet applicable independence criteria as auditors of Finablr.
Also today, Finablr announced EY’s resignation as its auditor. In their letter of resignation, EY cited “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”.
On March 17, 2020, Finablr announced potential insolvency appointment. 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.
That update was published just a couple of days after the company announced a number of factors that were placing significant constraints on its access to daily liquidity and its ability to negotiate longer term financing. Since that announcement, these constraints have become amplified, Finablr said on Monday. 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.
In addition, the Board has been informed of the presence of cheques (written by Group companies and dating back to before the IPO), which may have been used as security for financing arrangements for the benefit of third parties. A preliminary view is that the amount of these cheques totals approximately US$100 million. The existence of these cheques has only recently been brought to the attention of the Board and urgent investigations are ongoing.