Finablr group firm hit with £1.5m penalty for money-laundering breaches
Xpress Money Services owed creditors an estimated £33m, including £18.7m in ‘unrecorded transactions’
The HM Revenue & Customs has issued a £1.5 million penalty notice to a Finablr group firm for alleged money-laundering breaches, the Times reported.
The penalty is expected to form part of its creditor claim in the administration and was related to alleged breaches before the appointment of administrators last year, the report added.
Founded by UAE-based tycoon, B R Shetty, Finablr group is a collapsed former FTSE 250 company.
The penalty was slapped on Canary Wharf-based Xpress Money Services, a subsidiary of UAE Exchange, owes creditors almost £19m in unrecorded transactions.
The company provided cross-border money transfers for the company itself and affiliated entities through company-appointed agents, among them banks, retail outlets and other financial institutions.
According to the report, UAE Exchange was placed under the supervision of the Central Bank of the United Arab Emirates in March 2020 as Finablr began to fail.
Last year, the Financial Conduct Authority appointed joint special administrators for Xpress Money following concerns about the safeguarding of funds.
In August 2020, tax office suspended the firm’s registration under money-laundering regulations.
The Times report added that now HMRC has also issued a ‘notice of cancellation of registration’ of the company.
The Finablr group was unravelled less than a year after its £1.2 billion flotation in London in May 2019. It became embroiled in an alleged fraud scandal and revealed about $1bn of undisclosed debt.
The group appointed administrators from PKF GM in March last year.
Indian-born Shetty, 80, also founded and listed NMC Health, the FTSE 100 international private hospitals group, which became mired in a fraud scandal in early 2020.
The collapse of two FTSE companies resulted in significant losses for investors, created multi-billion pound debts, and prompted international investigations by law enforcement agencies into NMC.
According to reports, creditors of Xpress were owed an estimated £33m, including £18.7m in ‘unclaimed unrecorded transactions’.
The administrators discovered ‘historical issues’ with Xpress Money’s bookkeeping. A review also uncovered ‘material items which may not have previously been included on the company’s balance sheet’.
It is reported that administrators faced huge challenges in obtaining records from Xpress Money of its financial position and to identify creditors and debtors.
HMRC declined to comment on the latest development.