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A ‘change in operational priorities’ is the reason behind Emma Shand’s immediate resignation as managing director and CEO of embattled card payments provider EML Payments (ASX: EML) - a role she has held for less than a year.
Announced today, former managing director of Bank of Ireland’s cards business Kevin Murphy has taken up Shand’s role on an interim basis while the company commences a global search for a permanent replacement for the outgoing CEO.
Shand was appointed in July 2022, replacing former CEO Tom Cregan who oversaw a rocky ride for the company’s share price prior to his resignation and after 10 years at the helm of the payment solutions firm.
According to EML, the reshuffle at the top of the company’s leadership team is part of ‘several new initiatives designed to reposition the EML business’.
These include the confirmation of immediate operational priorities and the appointment of investment banking adviser Barrenjoey to conduct a strategic review of the EML business which may include 'a potential sale of all or parts of the business'.
With Murphy’s appointment, EML appears to be re-positioning itself to appease the Irish banking regulator which recently told the company it was ‘not satisfied’ with the company’s remediation efforts.
Since May 2021, EML’s Irish subsidiary PFS Card Services (Ireland) Limited (PCSIL) - a distributor of pre-paid Mastercard cards and Visa cards - has been undertaking remediation work at the behest of the Central Bank of Ireland (CBI) after the regulator raised issues with the governance, resourcing, reporting, risk methodologies, controls and risk frameworks, capital adequacy, safeguarding and transaction monitoring of the business.
In EML’s statement today, accompanying the announcement of Shand’s resignation, the board says it is ‘committed to engaging with the CBI’ to progress remediation efforts swiftly.
As such, the board has established a sub-committee to oversee the remediation program, a comprehensive reporting schedule for reporting on remediation progress, and commenced a global search for a new appointment to the EML board sub-committee with experience in remediation processes in Ireland and the UK.
Leading these new strategic priorities on an interim basis is London and Dublin-based Murphy, whom EML says has a 'deep understanding of the global payments industry, has significant regulatory experience (including with the CBI) and has been involved in several successful business turnaround scenarios for private equity funds'.
Other operational priorities under EML’s new plan include a cost optimisation program, a focus on core businesses for growth, and a plan to recognise and retain top-performing talent.
“The renewed board has spoken with internal and external stakeholders and formed a view on the urgent priorities for the business,” newly appointed EML chairman Luke Bortoli says.
“We are focused on doing the right thing by our people, customers, regulators and shareholders and we are committed to taking actions that will help the business move through its immediate challenges, deliver sustainable growth in the medium to long term and maximise value for shareholders.”
Bortoli adds that he is excited to welcome Murphy as interim group CEO.
“His understanding of the Irish and broader European regulatory environments, previous interactions with the Central Bank of Ireland and deep experience in the payments sector are perfectly aligned to addressing the needs of our business today,” Bortoli says.
Shares in EML are up 9.57 per cent to $0.64 per share at 11.09am AEDT.
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