Travelex owner Finablr PLC’s (LON:FIN) auditor Ernst & Young (EY) has resigned over concerns about the company’s connections with NMC Health, the composition of the board, corporate governance and £81mln of dodgy cheques.
The currency exchange and transfers group, which earlier this month said it has started drawing up plans for potential insolvency, also said that two directors had resigned with immediate effect on Friday.
EY had previously demanded the resignation of directors Abdulrahman Basaddiq, as a representative of founder BR Shetty, and Bassam Hage, as a former EY employee, as a condition of their continuing to act as auditor of the company.
“The board was unable to accommodate EY's requirements in full in the time allowed to them and as a result EY confirmed their resignation in writing on the evening of Sunday 29 March,” the company said in a statement on Monday.
In his letter of resignation, Basaddiq said: "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, referred to in the company's announcement of 16 March 2020.”
The UK financial watchdog had shares in Finablr suspended after the company said it had discovered around US$100mln (£81mln) in previously unknown cheques that may have been used as “security for financing arrangements for the benefit of third parties”.
The group was founded and remains controlled by a company owned by the family of BR Shetty, who also founded private hospital operator NMC Health PLC (LON:NMC), which is currently facing its own investigation by the Financial Conduct Authority after an independent review uncovered the issuing of similar cheques, as well as “potential discrepancies and inconsistencies” in bank statements.