Dubai: Finablr, the holding company for UAE Exchange Centre, has gone in for a temporary suspension of trading on the London Stock Exchange. This follows the announcement last week that an internal investigation is being launched to go through the company’s operations and see if there are any discrepancies.
The Board of Directors have now found instances of a possible abuse of power, according to legal sources.
A similar investigation at NMC Health unearthed massive irregularities, which included a $2.7 billion loan that none of its “independent” board of directors knew about.
Both Finablr and NMC Health, were founded by the UAE based Indian billionaire Dr. B.R. Shetty.
Finablr said in a statement: “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 $100 million. The existence of these cheques has only recently been brought to the attention of the Board and urgent investigations are ongoing.”
The FCEO, Promoth Manghat, meanwhile has decided to "step down", along with all the other director roles he holds in the financial services group. The resignation has been accepted.
Finablr CEO 'steps down'
It was just last week that the Board had placed its its full faith in the company’s executive management.
Just recently, Promoth’s brother, Prasanth, was sacked as the CEO of NMC Health after the internal investigation there found evidence of certain irregalr payments during his tenure.
“The Board will immediately commission a search for a new CEO, to be in place as soon possible,” the company said in the statement to London Stock Exchange. “Further announcements will be made in due course.
But the statement does add: “Promoth has agreed to continue to support the Group while the Board finds a suitable successor.
The Board is also setting up a committee of its “independent 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. “The committee will meet on a regular basis and work with the Company's advisors, including those newly appointed advisors announced below.”
UAE Exchange has decided to temporarily suspend any new transactions at all of its branches and its online platforms.
UAE Exchange halts operations
“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 in an emailed statement.
“We are currently focused on processing all existing transactions as quickly as possible,” the company added, while apologizing to its customers for any inconvenience caused.