Finablr, the holding company of the UAE Exchange, on Monday announced that it is suspending its listing temporarily from the London Stock Exchange while its chief executive Promoth Manghat will also step down as the company grapples with liquidity squeeze and some cheques issuances problem.
The announcement came as it announced that cheques estimated to be $100 million were issued prior to its IPO that may have benefitted third parties. The cheques were issued as security for financing arrangement for the benefit of third parties.
On March 12, 2020, the company admitted that a number of factors that were placing significant constraints on its access to the daily liquidity, managing its business effectively and its ability to negotiate longer term financing.
"Since that announcement, these constraints have become amplified and have now reached a point where 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," it said, adding that "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 company said its board is unable accurately to assess the financial position of the company and there is a material uncertainty about the group's ability to continue as a going concern. The board is looking to put in place a package of urgent measures aimed at restoring confidence and stability across its stakeholders - those measures are set out below.
The company said in a statement that its board has accepted resignation of Manghat. But he will continue to support the Group while the Board finds a suitable successor.
The board has decided to establish a committee of its Independent Non-Executive Directors to carry out a comprehensive review of the company's liquidity and cash flow management functions, its financial and debt position, and its strategic options. It has appointed Kroll to undertake an independent review.
