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Slow-moving EML hit with sell-off after UK issues emerge

EML Payments shares dropped 34 per cent today after it revealed it had stopped bringing in new customers, agents and distributors in the UK after that nation’s financial regulator raised concerns about its subsidiary Prepaid Financial Services.

Oct 31, 2022, updated Oct 31, 2022
EML chief executive Emma Shand.

EML chief executive Emma Shand.

It’s the same issue that hit the company in Ireland, which related to its governance around its anti-money laundering issues and counter terrorism financing, which cost it $11.4 million in remediation. This time around, EML said the cost would be about $5 million.

Among its products, EML offers payment solutions including prepaid cards to companies that can be used as gifts, payment or rewards.

The company said the UK Financial Conduct Authority had raised concerns that were similar to those raised by the Central Bank of Ireland relating to PFS Card Services. That led to CBI ordering growth restrictions on the Irish business until remediation was carried out.

The company brought in Emma Shand to replace Tom Cregan as chief executive to restore the company in Europe.

But now the agreement to stop “onboarding” new customers would remain in place until the FCA was satisfied the company’s UK business had “executed a remediation plan based on satisfactory third-party assessment”.

Shand said EML had not moved fast enough.

“We need to do better and we will,” Shand said.

“We have made some key senior management appointments and are putting more resources into building capability in key areas including governance, risk management and regulatory compliance.

“We understand we have an important role to play in tackling financial crime and to keep our customers safe at a time (when) threats are ever-increasing across the banking and payments sectors.

“We are also well underway with our strategic review to simplify our business, better integrate previous acquisitions into EML and grow sustainably, which shareholders will be updated on at the AGM in late November.”

 

 

 

 

 

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