EY has resigned as auditor of Finablr after the troubled payments firm could not accommodate some adjustments it requested, including changing the composition of its board.
Trading in the London-listed firm’s shares was suspended earlier this month after Finablr warned it was preparing for potential insolvency. It has launched an investigation into its finances.
Finablr also said it had discovered $100m (£81m) in undisclosed cheques made before its initial public offering in 2018 that may have been used as security for financing arrangements for the benefit of third parties.
Operations of the company’s unit in the United Arab Emirates (UAE) have been seized by the country’s central bank.
Finablr’s struggles mark the latest blow for UAE-based billionaire BR Shetty, its founder and majority owner. Shetty also founded hospital operator NMC Health, whose shares were suspended last month after evidence of potential fraud was uncovered.
In an update to the stock exchange this morning, Finablr said EY had cited “concerns arising out of recent events at the company and NMC Health plc” among the factors contributing to its decision.
Finablr also said that prior to its resignation, EY had requested a number of changes as a condition of it continuing to audit the company, including changes to the composition of its board.
“The board was unable to accommodate EY’s requirements in full in the time allowed to them,” Finablr said.
“EY’s resignation follows a number of concerns raised in relation to the composition of the company’s Board,” an EY spokesperson said.
They added that these concerns included “adequacy of corporate governance and recent issues that resulted in an independent review of the company’s financial arrangements, including of related-party transactions and on and off-balance-sheet debt”.
“EY set out a number of conditions that were required in order for it to remain as auditors to Finablr, which the company did not fully meet during the specified timeframe,” they added.
Finablr also said on Monday that Abdulrahman Basaddiq and Bassam Hage have stepped down as directors of the company.
“I wish to make it clear that I had no knowledge concerning the matters which are the subject of an independent investigation, including the use of cheques,” Basaddiq said in his resignation letter.