EML answers Sydney market query on Irish regulatory issues

Australian fintech EML Payments has answered queries from the Sydney stock exchange operator on the nature and timing of communications from the Central Bank of Ireland earlier this month on "significant regulatory concerns" surrounding its Irish unit.

The company said on Wednesday that it has complied with listing rules in relation to timely disclosures of the price-sensitive information.

Shares in EML tumbled 46 per cent last Wednesday as it revealed the Central Bank was investigating anti-money laundering and counter-terrorism concerns at Trim, Co Meath-based PFS Card Services (Ireland) Ltd, part of the Prepaid Financial Services (PFS) the Australian group bought last year.

EML said in a statement that day, after two days of its shares being suspended, that the Central Bank had indicated it may restrict the activities of PFS Card Services (Ireland), which is responsible for PFS’s European business and accounted for 27 per cent of group revenues in the first three months of the year.

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EML's response to a so-called aware query from the Australian Securities Exchange (ASX) on the company's handling of the share-sensitive information was published on Monday.

Concerns

PFS Card Services received a call at 10pm on Thursday, May 13th, Australian time (1pm Irish time) and followed up with a letter a little over an hour later highlighting its concerns, EML said.

"EML obtained urgent legal advice from its Irish lawyers following the receipt of the information. This occurred on Friday morning Irish Time [Friday evening Australian time, after trading on the ASX closed] and again on Saturday, May 15th, 2021," it said.

“The board of EML was informed of, and provided with a copy of, the CBI’s letter on Saturday, May 15th. The board met on the morning of Monday, May 17th, and the company requested a trading halt prior to the market opening, while it considered the information and prepared an ASX announcement.”

The announcement came two days later. EML has promised to submit a response to the Central Bank by close of business on Wednesday, though analysts estimate it will take some time for the regulator to consider this.