Finablr

Finablr is a financial services holding company. It is listed on the London Stock Exchange, but its shares are currently suspended from trading.

Finablr
TypePublic limited company
LSE: FIN
(Suspended 9 April 2020)
IndustryFinancial services
Founded2018
HeadquartersAbu Dhabi
Key people
B. R. Shetty
(co-chairman)
Michael Tomalin
(co-chairman)
Bhairav Trivedi
(Group CEO)
Joe Hurley
(Group COO)
Mehul Desai
(Group CTO)
Binay Shetty
(Exec Director)
ProductsPayment Technology
Foreign Exchange
Cross-Border Payments
Revenue$1,434.6 mil* (2018)[1]
$164.8 mil* (2018)[1]
$-13.3 mil* (2018)[1]
Number of employees
18,201 (2018)
SubsidiariesTravelex,
UAE Exchange,
Xpress Money,
TimesofMoney,
Remit2India,
Bayan Pay,
Unimoni,
PEaaS,
Swych,
Nyuvo,
Ditto
Websitewww.finablr.com
Footnotes / references
* Figures as declared in 2018[2]

History

The company was established by the Indian-born former billionaire B. R. Shetty in April 2018.[3] Initial investments included UAE Exchange, which Shetty acquired in 1980, and Travelex, which was acquired in 2014.[3]

In October 2018, Finablr brands, Travelex and Swych, launched a cross-border shopping solution for WeChat Pay users.[4]

In November 2018, Finablr acquired India's digital payments firm TimesofMoney from Network International to capitalise on the growth of e-commerce.[5] Also in November 2018, Finablr became a majority shareholder of Swych, a digital gifting platform.[6][7]

In February 2019, Finablr announced collaboration with RippleNet for cross-border payments to process blockchain-powered cross-border transactions in Thailand.[8][9]

The company was the subject of an initial public offering on the London Stock Exchange in May 2019.[10]

In January 2020 it was disclosed that shares representing 56% of the company had been pledged by BRS Ventures & Holdings, a company controlled by Dr BR Shetty, as collateral for borrowings.[11]

In February 2020 it was announced by Ditto Bank, a wholly owned subsidiary of the business, that their consumer-facing (B2C) operation would cease over the following few months.[12][13]

Throughout February and March 2020 shares in the business fell more than 90% compared with their value at 31 December 2019.[14] This followed a considerably turbulent time for the business following the Travelex cyberattack that took place on New Year's Eve 2019 and directly affected its services across the globe for around six weeks,[15][16] with the financial impact of this currently estimated in the region of circa £25 million on a like-for-like basis.[17] The business's share price had also been impacted by the founder, co-chairman and primary shareholder B. R. Shetty's links to the troubled NMC Health business, of which is he is also a founder and co-chairman, combined with the headwinds dealt by the ongoing spread of the coronavirus. The business said:

"The outbreak of Covid-19 is an incremental negative for Travelex's business given broad exposure to airports and travel flows. VAT and related services will also be negatively impacted. While China and other Asian in-country revenue account for approximately 10% of Travelex revenues, other markets closely linked to Asian outbound travel are also experiencing headwinds."[17]

On 12 March 2020, the business announced that it was taking steps to assess accurately its current liquidity and cashflow position,[18] with shares trading at circa 7 pence, down 97% from 11 December 2019 when their value peaked at 215 pence.[19]

On 16 March 2020 the business's listing on the London Stock Exchange was suspended as it was announced that it was in danger of collapse having identified circa $100m (£81m) of undisclosed financing, which meant it no longer had any certainty over its financial position. Simultaneously, Promoth Manghat, Group CEO, left the business.[20] The business also stated that it was no longer able to provide certain payment processing services; however it failed to address which services this entailed. Administrators, Kroll, were appointed to carry out an independent investigation into its finances.[21]

On 17 March 2020 the business announced that it has engaged an accountancy firm to undertake rapid contingency planning for a potential insolvency appointment,[22] with administration likely later in the week.[23]

On 18 March 2020 the business announced that its UAE Exchange division had been taken over by the Central Bank of the UAE with immediate effect. The Central Bank of the UAE also stated that it had commenced an examination of UAE Exchange in order to verify its compliance with applicable laws and regulations.[24]

On 29 March 2020 EY (Ernst & Young LLP) resigned as auditor of the business.[25]

On 9 April 2020 it was reported that Travelex had paid the ransom fee of $2.3 million to restore their systems. While paying the ransom may have restored the Travelex network, for those whose data was potentially compromised, they are stuck in limbo and no detail of this possible breach is currently available.[26][27]

On 9 April 2020 shares in the business were suspended from the London Stock Exchange. The business announced the resignation of Promoth Manghat as chief executive with immediate effect the same day, as well as the appointments of administrators Kroll and Houlihan Lokey to carry out an independent investigation into its finances. Among other localised authorities the UK's Financial Conduct Authority and the Central Bank of the United Arab Emirates are also investigating the business's finances.[28]

On 22 April 2020 the Travelex division announced that it had placed itself up for sale with immediate effect and was working with administrators PwC on the sale process, it stated that the division had "communicated this intention to Finablr".[29][30]

During April 2020 the operations of most of the business's fascias were suspended in their entirety, Travelex being a current exception who continue to provide a limited service. UAE Exchange, Xpress Money, TimesofMoney, Remit2India, Unimoni and Ditto (which had ceased previously) all display suspension notices on their corporate website homepages

"[division name] is temporarily unavailable for undertaking transactions. We regret the inconvenience and thank you for your understanding and cooperation as we endeavour to restore the service"[31]

On 30 April 2020 Finablr announced previously undeclared debts of around $1.3 billion had been identified by Houlihan Lokey and Kroll as part of their investigations, and that it "cannot exclude the possibility that some of the proceeds of these borrowings may have been used for purposes outside of the Finablr Group".[32][33]

On 5 May 2020, despite remaining a Finablr-owned business, co-branding of the Travelex division introduced mid-2019 appears to have been removed from its online presence.[34][35]

During June 2020, Xpress Money, a Finablr business, had its authorisation to operate withdrawn by the UK's Financial Conduct Authority.[36]

Banking licence

Finablr has a European Banking licence through the French division of Travelex.[37][38]

Major shareholders

At the date of the initial public offering, Dr Bavaguthu Raghuram Shetty owned 64.2% of the shares and Mr Binay Shetty owned 3% of the shares.[1] Other major shareholders included UX Investment Holdings Limited (6.8%), Brokerage House Securities (4.9%) and Tejera Capital (3.8%).[1] In January 2020, UX Investment Holdings sold 6% of the share capital and agreed a 90-day lock-up for the remaining shares.[39]

References
  1. "Prospectus". Finablr. Archived from the original on 13 January 2020. Retrieved 3 September 2019.
  2. Simeon Kerr (30 April 2020). "Finablr says debt may be 4 times higher than reported". Financial Times London. Archived from the original on 1 May 2020. Retrieved 30 April 2020.
  3. Mary Sophia (24 April 2018). "Billionaire B.R. Shetty Launches New Financial Firms Holding Company Finablr". Forbes Middle East. Archived from the original on 25 August 2018. Retrieved 24 August 2018.
  4. GmbH, finanzen net. "Leading Digital Gifting Platform Swych Partners with Leading Cross-Border Financial Services Firm Travelex to Introduce 'Travelex Pay', a WeChat Pay Powered Service | Markets Insider". markets.businessinsider.com. Archived from the original on 2019-08-27. Retrieved 2019-08-27.
  5. "Finablr acquires Indian digital payments firm to capitalise on e-commerce growth". The National. Archived from the original on 2019-08-27. Retrieved 2019-08-27.
  6. November 2018, 13th. "Finablr takes majority stake in digital gifting firm Swych". FinTech Futures. Archived from the original on 2019-08-27. Retrieved 2019-08-27.
  7. "Finablr stake in digital gift card platform Swych has now increased". Cards International. Archived from the original on 2019-08-27. Retrieved 2019-08-27.
  8. "Finablr Foreign Exchange Firm Integrates RippleNet for Cross-Border Payments". February 14, 2019. Archived from the original on August 27, 2019. Retrieved September 3, 2019.
  9. "Finablr's Remittance Brands UAE Exchange, Unimoni Join RippleNet - Cryptovest". cryptovest.com. 2019-02-12. Archived from the original on 2019-08-27. Retrieved 2019-08-27.
  10. "UAE's Finablr slumps below IPO price in London market debut". Reuters. 15 May 2019. Retrieved 3 September 2019.
  11. "Finablr sinks on news of shares-as-collateral pledge". Investors Chrionicle. 24 January 2020. Archived from the original on 1 March 2020. Retrieved 1 March 2020.
  12. "Ditto's strategic pivot to Banking as a Service -".
  13. "Ditto Bank on Facebook Watch" – via www.facebook.com.
  14. "FINABLR share price (FIN) - London Stock Exchange". www.londonstockexchange.com. Archived from the original on 2020-03-17. Retrieved 2020-03-11.
  15. "Travelex site taken offline after cyber attack". BBC News. 2 January 2020. Archived from the original on 7 January 2020. Retrieved 11 March 2020.
  16. Treanor, Jill. "Banks shun Travelex as cyber-attack jitters linger". Archived from the original on 2020-03-06. Retrieved 2020-03-11 – via www.thetimes.co.uk.
  17. "Travelex and Covid-19 update - RNS - London Stock Exchange". www.londonstockexchange.com.
  18. "Operational Update and Independent Reviews - RNS - London Stock Exchange". www.londonstockexchange.com.
  19. "FINABLR share interactive chart (FIN) - London Stock Exchange". www.londonstockexchange.com.
  20. "Travelex owner Finablr in danger of collapse as shares suspended". cityam.com. Archived from the original on 2020-03-22. Retrieved 2020-04-30.
  21. "Suspension of Listing, Trading Update, Directorate Change and Urgent Board Measures". londonstockexchange.com.
  22. "potential insolvency appointment". Archived from the original on 2020-03-17. Retrieved 2020-04-30 – via londonstockexchange.com.
  23. "Travelex owner Finablr on the brink of collapse as it appoints insolvency firm". Archived from the original on 2020-03-18. Retrieved 2020-04-30 – via standard.co.uk.
  24. "UAE Central Bank to oversee UAE Exchange Centre". Gulf News. 18 March 2020. Archived from the original on 18 March 2020. Retrieved 18 March 2020.
  25. Daniel Thomas (30 March 2020). "EY quits as auditor for Travelex owner Finablr". Financial Times London. Archived from the original on 22 April 2020. Retrieved 1 May 2020.
  26. Lawrence Abrams (9 April 2020). "Travelex Reportedly Paid $2.3 Million Ransom to Restore Operations". Bleeping Computer. Archived from the original on 9 April 2020. Retrieved 5 May 2020.
  27. Anna Isaac (9 April 2020). "Travelex Paid Hackers Multimillion-Dollar Ransom Before Hitting New Obstacles". The Wall Street Journal. Archived from the original on 22 April 2020. Retrieved 5 May 2020.
  28. Anna Menin (16 March 2020). "Travelex owner Finablr in danger of collapse as shares suspended". City AM. Archived from the original on 28 March 2020. Retrieved 30 April 2020.
  29. Travelex Financing Plc (22 April 2020). "Travelex Financing Plc Sale process" (PDF). Travelex. Archived (PDF) from the original on 1 May 2020. Retrieved 1 May 2020.
  30. Travelex Financing Plc (22 April 2020). "Travelex Financing Plc Sale process". Euronext Dublin. Archived from the original on 29 April 2020. Retrieved 1 May 2020.
  31. Homepages of UAE Exchange, Xpress Money, TimesofMoney, Remit2India, Unimoni and Ditto
  32. Gulf News (1 May 2020). "UAE Exchange House's parent company now 'finds' $1 billion plus debt". Gulf News. Archived from the original on 1 May 2020. Retrieved 1 May 2020.
  33. Finablr (30 April 2020). "Current indebtedness position". Euronext. Archived from the original on 1 May 2020. Retrieved 1 May 2020.
  34. Travelex (19 April 2020). "Travelex corp site showing co-branded logo". Travelex. Archived from the original on 19 April 2020. Retrieved 5 May 2020.
  35. Travelex (5 May 2020). "Travelex corp site showing co-branding removed from logo". Travelex. Archived from the original on 5 May 2020. Retrieved 5 May 2020.
  36. "Xpress Money Services Limited must not carry out any regulated activity". Financial Conduct Authority. 1 June 2020. Retrieved 3 July 2020.
  37. "List of supervision entities" (PDF). Banking Supervision. Archived (PDF) from the original on 24 March 2020. Retrieved 14 March 2020.
  38. "Legal Mentions - Ditto Bank Ditto". Dittobank.com. 20 June 2014. Archived from the original on 9 March 2019. Retrieved 14 March 2020.
  39. "Two Finablr Shareholders Sell 6% Stake; Cyber Attack Contained". Morning Star. 8 January 2020. Retrieved 19 January 2020.
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