Shareholders of Swych Inc are suing Finablr Ventures Holdings, Ltd. and UAE Exchange International Holdings, Ltd. This becomes clear from a complaint filed with the Delaware District Court on February 10, 2021. Although the original complaint in this case is sealed, a redacted version of it was made available to the FX News Group team.

The plaintiffs in this case are Deepak Jain, Mehul Desai, and Jain-Desai, LLC. They are founders and now minority shareholders of Swych, a technology company that built a mobile platform through which customers can purchase and send gift cards. Swych initially obtained strategic investments from Finablr Ventures and UAE Exchange, which it used to grow and expand Swych’s operations.

As Swych became successful, Finablr and UAE Exchange recognized the value of Swych’s technological achievements and sought to acquire a controlling interest in it, which they ultimately did through a September 2018 Agreement. This was not enough.

In 2019, the defendants agreed to acquire all of the minority interests in Swych. After agreeing to a Stock Purchase Agreement (SPA) in 2019, the defendants started to delay the completion of the acquisition. All the while, the defendants appropriated Swych’s employees and resources for their own benefit.

Swych, for instance, reorganized its engineering team to work on projects for the Finablr Group, which it used to expand its payment operations. In fact, the Finablr Group paid Swych’s employees’ salaries, including through its Delaware incorporated subsidiaries Moneydart Holdings, Inc., Moneydart Global Services, Inc., and Moneydart Services, Inc.

The Finablr Group further instructed Swych to reduce its consumer operations and transition Swych’s existing customers to comparable services offered by the Finablr Group.

Despite its agreement to purchase the minority interests in Swych, and despite its conduct in transferring employees and assets to other Finablr Group activities, Finablr Ventures began to systematically delay the completion of that purchase and obfuscate its reasons for delay.

The parties initially intended to complete the acquisition by October 15, 2019. But as that date neared, Finablr Ventures informed the plaintiffs that its auditors had determined that Desai was a “related-party” under United Kingdom securities laws, which required Finablr Ventures and the Finablr Group to take certain unspecified remedial steps. However, they assured the plaintiffs of the completion of the acquisition by November 14, 2019. Soon after, however, Finablr Ventures claimed further delays in completing the undefined corrective measures regarding alleged related party issues.

While Finablr Ventures predicted that it only needed two to four more weeks, in December 2019, it again delayed, claiming that it could complete the acquisition after a Finablr Ventures and Finablr Group board meeting the following month.

However, that meeting provided no such resolution. Instead, Finablr Ventures then attempted to renegotiate the terms of its agreement with the plaintiffs. While Finablr Ventures had a continuing obligation to purchase the minority interests in Swych, it requested that the plaintiffs accept a line of credit in lieu of a cash payment. Finablr Ventures claimed that this would somehow alleviate the related-party concerns with respect to Desai and that Jain was now also a related-party who needed to accept a line of credit.

In reality, according to the complaint, this request appears to have been a calculated effort to maintain the appearance of Finablr Ventures’ intent to comply with its binding obligations while balancing the severe liquidity issues faced by the Finablr Group. At the time, the Finablr Group had over $1.3 billion in debt, much of which it had been hiding from disclosure, despite its reporting obligations as a publicly held corporation. The Finablr Group had been near insolvency for much of its existence as a public corporation, and the London Stock Exchange has since halted trading of its shares.

Finablr Venture and UAE Exchange now refuse to honor their contractual obligations to purchase the plaintiffs’ minority holdings in Swych.

Plaintiffs therefore bring this suit for breaches of contract and promissory estoppel to recover damages fo the defendants’ failure to purchase the plaintiffs’ minority interests in Swych.