Finablr shares tumble after it says half of its stock pledged as collateral for Travelex debt

Company’s share price dropped 27% to 95 pounds (Dh456) at the market close in London on Friday in the wake of its disclosure

BR Shetty claims former managers at NMC Health, Finablr and his private companies took out loans and signed cheques without his knowledge. Leslie Pableo for The National  

Payments and foreign exchange holding company Finablr's share price tumbled on Friday after a bourse filing showed its majority owner, UAE-based Indian billionaire B.R. Shetty, pledged more than half of its stock as security to raise loans.

Finablr said on Friday that 56.03 per cent of its stock, or 392,220,890 shares, was pledged as a security against borrowings by BRS Investments, an investment company owned by Mr Shetty, to buy Travelex, according to a filing to the London Stock Exchange, where its shares trade. The payments processing company's shares plunged 27.37 per cent to 95 pounds (Dh456) at the market close in London on January 24.

Finablr's "operations continue to function as normal," the company said. "BRS has reassured the company around the level of security represented by its shareholding in Finablr and the discussions that it has had with its banking group around repayment/refinancing of the loan as well as the other collateral sources should these be required."

Mr Shetty created Finablr in 2018 as a holding company to consolidate his finance brands and listed the company on the London Stock Exchange in 2019 after completing an initial public offering that valued the firm at $1.6bn.

Finablr suffered a setback earlier this month after foreign exchange company Travelex - one of its portfolio firms - experienced a cyberattack that forced the company to take its systems offline. The company sought to reassure shareholders that the attack will not impact the group’s financial performance.

"The recent cyber incident at Travelex is in the course of being resolved and has no impact on 2019 results and also is not expected to have a material impact on the group's performance in 2020," Finablr said in a statement to the bourse on Friday.

The share drop is the latest challenge facing Mr Shetty after another one of his London-listed companies, UAE healthcare provider NMC Health, took a blow from allegations made by short seller Muddy Waters Capital. In its December report, the short seller alleged that the healthcare group had inflated cash balances, overpaid for its assets and understated its debt.

In January, NMC Health said it appointed the former Federal Bureau of Investigation director Louis Freeh and his risk management firm Freeh Group International Solutions to look into allegations raised by Muddy Waters.