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Australian payments giant EML Payments (ASX: EML) has been hit with a class action lawsuit from Shine Lawyers on behalf of shareholders, alleging the company made misleading representations regarding its corporate governance and regulatory compliance.
The suit comes after EML’s Irish subsidiary PFS Card Services Ireland came under fire in May when the Irish central bank revealed “significant regulatory concerns” in relation to PFS’ compliance with anti-money launder and counter-terrorism rules.
The revelation caused EML Payments Limited’s share price to plunge 46 per cent in a day, yet it took the Brisbane-based company four days to request a trading halt.
“The Central Bank of Ireland raised the alarm over potential non-compliance with anti-money-laundering and counter-terrorism financing regulations with PFS on May 13,” Shine Lawyers class actions practice leader Joshua Aylward said.
“This suggested the company’s European operations could be in jeopardy, but EML failed to disclose this to the Australian share market in a timely manner.”
Aylward said a global payments company, specialising in pre-paid gift and sports-betting cards, should have strict controls and reporting structures in place to protect shareholders.
“It is alleged that EML’s conduct showed disregard for its regulatory obligations and to the thousands of Aussies who invested their money into its businesses,” he said.
EML Payments released a response this morning denying any liability.
"The proceedings are said to relate to whether EML failed to disclose information about correspondence received in May 2021 from the Central Bank of Ireland (CBI) in a timely manner," the company said.
"EML considers that it has at all times complied with its disclosure obligations in that regard. EML has not been served with the proceeding at this time, denies any liability and will vigorously defend the proceedings."
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