Regulation

Afterpay Boosts Governance Amid Regulatory Scrutiny

Afterpay Boosts Governance Amid Scrutiny

As the quickly growing lender bolsters its governance and faces scrutiny from a financial watchdog, Australia’s Afterpay Touch Group Ltd is said to be working toward bringing on a “majority independent board with an independent chair.” Afterpay’s shares were up as high as 7.6 percent on the news, Reuters reported.

Investors have reportedly been “spooked,” with the Australian Transaction Reports and Analysis Center (AUSTRAC) ordering an external audit of the company to investigate potential non-compliance with anti-money laundering laws. Amid this news, the firm’s Executive Director and Group Head David Hancock will depart the company following a handover. Anthony Eisen, the company’s co-founder and executive chairman, will take the helm as chief executive.

In addition, Co-founder and CEO Nick Molnar will take the position of the firm’s global chief revenue officer. Lastly, Independent Director Elana Rubin will serve as interim chair until someone is placed in a new independent chair role. Damon Callaghan of ECP Asset Management said, according to the report, “They are looking to improve the governance of the board with an independent chairperson, so these changes can only be positive.”

Afterpay notched $221.08 million (A$317 million) in new capital via a share placement last month, which involved Hancock and both co-founders selling a total of 4.5 million shares at A$23 piece for the equivalent of A$103 million. In separate Afterpay news, ThinkSmart Europe Limited has sold nearly all – 90 percent – of its share capital in ClearPay to the Australia-based company, ThinkSmart said in an announcement last August.

With that deal, Afterpay is acquiring ClearPay’s contracts with service providers, as well as employees with local knowledge of the U.K. market. ClearPay enables retailers to allow shoppers to make purchases of up to £450 at the point of sale and spread the cost over three monthly, interest-free payments.

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