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PHOTO BY ARCHIVE
DUBAI – The parent company of UAE Exchange said that is looking at entering an insolvency process as the UAE Central Bank stepped in to ensure that UAE Exchange “swiftly settle(s) outstanding remittances” of its customers.
UAE Exchange on Monday shut down its branches, saying it was temporarily suspending new transactions at its online platforms and more than 150 branches. The company, which has grappled with customer complaints of delayed fund transfers since February, said it was the result of “certain operational challenges”.
On Tuesday (March 17), UAE Exchange’s parent company Finablr said it has hired an accountancy firm to help with “rapid contingency planning” for the insolvency process.
Finablr said there was “material uncertainty about the Group’s ability to continue as a going concern”, adding that it has discovered cheques valued at $100 million (Dh367 million) “which may have been used as security for financing arrangements for the benefit of third parties”.
Chief Executive Promoth Manghat has resigned as corporate investigations firm Kroll conducted a review into the anomaly.
Meanwhile, the UAE Central Bank on Tuesday announced it is stepping in to oversee the operations of UAE Exchange, adding that its team of inspectors has begun an investigation to check the company’s compliance with laws and regulations.
“The Central Bank of UAE will take additional action, if necessary, once the examination is completed,” the UAE Central Bank said in a statement late on Tuesday. Currently, the UAE Exchange is only able to operate its Wage Protection System “until further notice”.
The Central Bank said it is also stepping in to “protect consumers” who faced delays in remittances sent through UAE Exchange.
“In order to protect consumers, the Central Bank of UAE has required the exchange house to swiftly settle outstanding remittances and all other already initiated transactions,” the Central Bank said.
UAE Exchange and Finablr are owned by UAE-based billionaire Dr B.R. Shetty, the founder of scandal-hit healthcare network operator NMC Health, which was accused of inflating its financial reports and major shareholders’ stakes, among others. Shetty has since resigned as co-chair of the leading UAE healthcare group. ICA/Expat Media
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