Australia's Afterpay defers raising $21 mln until watchdog-ordered audit
(Recasts with capital raising, adds details from statement)
June 26 (Reuters) - 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
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
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
Earlier in June, AUSTRAC ordered Afterpay to hire an
external auditor at its own expense and report back in 60 days
on the findings, in a bid to spur new financial service players
to take their money-tracking obligations seriously.
Afterpay said it would work closely with AUSTRAC and that it
was taking the audit "very seriously". It has formed a
sub-committee to oversee the external audit process and assist
the board in its interacting with the government agency.
($1 = 1.4372 Australian dollars)
(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by
Stephen Coates and Muralikumar Anantharaman)
First Published: 2019-06-26 02:17:09
Updated 2019-06-26 03:42:49
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.