27 Jun 2019
Australian buy-now-pay-later company Afterpay Touch Group said on Wednesday it is halting a $21 million capital raising as it waits to receive the recommendations of an audit ordered by the country’s financial crime watchdog.
The Melbourne-based company said it provided the Australian Transaction Reports and Analysis Centre (AUSTRAC) three candidates to conduct a mandated external audit on it over suspected non-compliance with anti-money-laundering laws.
Afterpay said in a statement to the stock exchange it will defer its A$30 million ($20.87 million) share sale to existing investors until it considers the audit’s recommendations. The raising was planned to top up a A$300 million underwritten placement earlier this month.
It said it “reserves the right” to not proceed with the capital raising.
Afterpay added that co-founders Anthony Eisen and Nick Molnar do not intend to sell any more shares in the next financial year after a filing to the Australian Stock Exchange revealed that the co-founders sold shares the day before AUSTRAC’s announcement, pocketing about A$47 million each.
Buy-now-pay-later players like Afterpay let shoppers purchase products without paying upfront, and without the regulatory hurdle of applying for a credit card or loan. They make money by receiving fees from vendors and from late payment charges.
By Nikhil Kurian Nainan, Reuters, 26 June 2019
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