PwC found the company’s position was concerning and pointed out its over-reliance on raising money from third parties. “There is a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern,” PwC found. The audit also referred to Dubai-based World Investments’lifeline investment of $433 million as “non-binding”. A Xinja spokesman confirmed there had been no communication with the investors since making the decision to exit banking.
Governance expert Helen Bird,who sits on the Australian Securities and Investment Commission’s corporate governance consultation panel,said companies can switch auditors if they are not pleased with the findings.
“The auditor’s role is to warn you about the potential problems,” Ms Bird said. “They may have been allergic to something they didn’t like the look of,reported it,and Xinja didn’t want to hear it.”
Xinja’s financial records show its losses have multiplied in recent years. In 2018,the company reported a loss of $6.5 million and the following year this had more than tripled to $21.8 million.
Over the course of this year,its once-dedicated customer base which had helped raise close to $5 million through crowdfunding,took to Xinja’s since-deleted online community forum to vent their fury about problems using the online bank.
The forum,accessed byThe AgeandSydney Morning Heraldusing open source technology,shows customers complaining about app crashes,frozen accounts and disappearing money.
“So I cannot send money right now because Xinja ‘cannot connect to servers. It’s not you,it’s us’,” one customer posted in February,to which Xinja responded:“Sorry the app hasn’t been playing ball this afternoon!“
In March,a customer complained of the high-interest “stash” accounts disappearing:“WTF is going on? Starting to lose faith in Xinja very quickly.”
Another customer asked in August when Osko – technology that enables instant bank transfers – would be installed. “It’s been pushed out a number of times. Sometime next year. US share trading seems to have taken priority over everything.”
A Xinja employee responded:“We’re aiming for this quarter.”
In late-September,a customer complained of repeatedly being locked out of their account due to the app’s inability to remember passwords. A Xinja employee once again promised changes were on the way. “The good news is that we’re aiming to move from an email verification sign in process to mobile verification in the near future,which will make things easier for you with the Apple auto-fill setting on your device.”
Less than three months later,the company terminated banking services–the same day the banking app crashed again. A spokesman for Xinja said the decision to return deposits was made only in the past week and the payments function was now working again.
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