Ernst & Young (EY) has resigned as auditor of Finablr, the owner of UAE Exchange, citing “concerns arising out of recent events” at the troubled payments firm and its affiliate, NMC Health.
The London Stock Exchange has recently suspended the trading of Finablr’s shares after the payments firm warned of potential insolvency.
“In their letter of resignation, EY cited ‘concerns arising out of recent events at the company and NMC Health,” Finablr said.
The accountancy firm also raised concerns regarding the “composition of the board of the company, the adequacy of corporate governance,” as well as the “recent issues that have caused the company to commission an independent review” of its financial arrangements.
The auditor’s departure marked another blow to the company, founded by Indian billionaire B.R. Shetty. The UAE-based business tycoon is the founder of hospital chain NMC Health, which also saw its shares suspended on the London Stock Exchange in February.
Shetty’s troubles began in late December, when US short-seller Muddy Waters published a report claiming NMC may have underreported its debt and inflated the value of its cash balances.
“What we found is likely just the tip of the iceberg,” Carson Block, the founder of Muddy Waters had said.
NMC denied the claims, although it subsequently announced it is conducting a legal review of the company’s finances.
Payments, currency exchange business
A few weeks ago, Finablr warned it could be heading towards insolvency, while its remittance and exchange unit, UAE Exchange announced the suspension of new transactions. The UAE’s central bank later seized the operations of its money transfer business in the country.
“The board is unable [to] accurately assess the financial position of the company and there is material uncertainty about the Group’s ability to continue as a going concern,” the company said.
The company said it has now reached a point where the constraints 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.”
(Writing by Cleofe Maceda; editing by Seban Scaria)
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