EML Payments (ASX:EML) share price on watch after responding to ASX query

The EML Payments Ltd (ASX:EML) share price will be on watch on Wednesday after responding to an ASX query this afternoon…

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The EML Payments Ltd (ASX: EML) share price might be one to watch on Wednesday.

This follows the release of an announcement just before the market close today.

What did EML release?

This afternoon EML released a response to a series of questions from the ASX Ltd (ASX: ASX) relating to a recent announcement regarding its European operations.

In case you missed it, last week the company revealed that the Central Bank of Ireland (CBI) has concerns over the company’s PFS Card Services (Ireland) (PCSIL) business in relation to Anti-Money Laundering/Counter Terrorism Financing compliance.

Given that 27% of its total revenue is derived from this business and the CBI could take away its licence, the market panicked and the EML share price crashed significantly lower.

What did it say today?

The Australian share market regulator quizzed the company on the timing of the announcements and whether it had known about the concerns earlier.

The response reveals that the Irish business received the letter from the CBI late in the evening on Thursday 13 May (Australian time) and then senior managers at EML met Friday morning to discuss the matter.

However, unfortunately for any investors that bought shares on Friday 14 May, urgent legal advice wasn’t obtained until Friday evening (Australia time), meaning a trading halt wasn’t requested until Monday morning after the EML board met.

EML explained:

“PCSIL received the CBI’s letter at 11:12pm on Thursday evening, 13 May 2021 (Australian time). The letter was preceded by a call with the CBI at 10:00pm on Thursday evening, 13 May 2021 (Australian time). The call was attended by senior managers of PCSIL, including an executive director.”

“EML’s Group Chief Risk Officer also attended the 10:00pm call and was sent a copy of the letter at 11:12pm. PCSIL’s executive director provided a copy of the letter to EML at 12:37am on Friday morning, 14 May 2021 (Australian time). The letter was provided as an attachment to a calendar invitation for a meeting to be held at 6:30am on Friday morning, 14 May 2021 (Australian time). The calendar invitation was sent to senior managers of EML, including EML’s Managing Director and Group CEO.”

“The Board of EML was informed of, and provided with a copy of, the CBI’s letter on Saturday, 15 May 2021. The Board met on the morning of Monday, 17 May 2021, and the company requested a trading halt prior to the market opening while it considered the Information and prepared an ASX announcement.

EML released its ASX announcement, lifting the trading halt, on the morning of Wednesday 19 May 2021 (Australian time), before trading on the ASX commenced.”

No update has been provided in relation to its dealings with the central bank. Shareholders will have an anxious wait for that one.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends EML Payments. The Motley Fool Australia has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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