BR Shetty resigns from Finablr unit Travelex’s board

Two other directors including son Binay Shetty also quit the company

FILE - In this Monday, June 7, 2010, file photo, a Travelex Group currency exchange booth is shown at Seattle-Tacoma International Airport in Seattle. A week after a malicious virus infected its network, the London-based foreign currency exchange company Travelex has yet to restore digital sales and was reported infected with ransomware by hackers threatening to release personal data unless it pays a $3 million ransom. In a Jan. 2, 2020, Twitter post, the company said the virus had compromised some of its services on New Year’s Eve and that it took all systems offline immediately. (AP Photo/Ted S. Warren, File)
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The UAE-based billionaire BR Shetty and two other directors resigned from the board of Travelex, which is owned by embattled payments and foreign exchange company Finablr.

The two other directors to have quit the company are Mr Shetty's son, Binay, and Abdulrahman Basaddiq, according to a statement from Travelex.

“The board will be seeking to appoint additional independent non-executive directors, as soon as practical,” Travelex said in a statement to the London Stock Exchange.

Promoth Manghat, who stepped down as the chief executive of Finablr on Monday this week, also resigned from the Travelex board on the same day, the company said.

The continuing board directors include Travelex chief executive Tony D'Souza and general counsel James Birch, according to the statement.

The development comes after Britain's market regulator suspended trading in Finablr this week following a series of revelations.

On Monday, the company said there was a "material uncertainty about the group's ability to continue" operations and on Tuesday the company said it appointed an accountancy firm to "undertake rapid contingency planning for a potential insolvency appointment".

Finablr is investigating cheques, dating back to before its initial public offering, worth $100 million (Dh367m) that may have been used as security for financing arrangements for the benefit of third parties.

The company’s board said its independent non-executive directors were reviewing the company's liquidity and cashflow management, its financial and debt position, and its strategic options.

Following the announcement about a potential insolvency appointment, the Central Bank of the UAE intervened in the running of Finablr's UAE Exchange  business on Tuesday to oversee its operations. The central bank also said an inspection team had begun an examination of UAE Exchange to "verify its compliance with applicable laws and regulations".

Finablr said in a statement on Wednesday it was "working constructively with the Central Bank". Travelex said in a separate statement it "maintained a legal and financing structure within the Finablr Group that is capable of operating separately, on a stand-alone basis".

Finablr was created in 2018 by Mr Shetty as a holding company to consolidate his finance brands including Travelex and UAE Exchange. It was listed on the London Stock Exchange in 2019 in a deal that valued the company at $1.3 billion. By the time its shares were suspended, the company's value had fallen to £77.2m (Dh328.4m)

Mr Shetty recently resigned as the director of NMC Health, after the company was accused by short seller Muddy Waters Research in December of inflating cash balances, overpaying for its assets and understating its debt.

On March 12, Finablr cited a number of issues affecting its business currently, including travel restrictions to limit the spread of coronavirus, the recent credit downgrade of Travelex’s bonds and a liquidity squeeze at both group and operational business.

A fund owned by Abu Dhabi's strategic investment arm Mubadala Investment Company acquired a minority stake in Finablr, a Mubadala spokpesperson told The National this week.

MIC Capital Partners, an investment vehicle owned and operated by Mubadala Capital, gradually accumulated a 3.4 per cent stake in Finablr.