Shares in Bank of Queensland Limited (ASX: BOQ) are down this afternoon after its soon-to-be new acquisition, Members Equity (ME) Bank, has been hit with criminal charges. At the time of writing, the Bank of Queensland share price is down 0.79% – its shares are swapping hands for $8.82 apiece.
For comparison, the S&P/ASX 200 Index (ASX: XJO) is trading 0.087% higher today.
The Bank of Queensland announced it was to acquire Me Bank in February this year, before conducting an equity raise to cover Me Bank’s $1.325 billion price tag.
Today, the Australian Securities and Investments Commission (ASIC) reported that charges against Me Bank were filled to the Federal Court of Australia on Tuesday.
Let’s take a closer look at the charges levelled at Me Bank that could be dragging on the Bank of Queensland share price.
Alleged breach of the Credit Act
According to ASIC, the charges stem from an investigation by the commission into ME Bank’s conduct, which ASIC claim saw the bank breach the Credit Act.
ASIC stated the charges are related to two sections of law:
- Sections 12DB and 12GB of the Australian Securities and Investments Commission Act, which guard against giving false or misleading representations.
- Sections 64 and 65 of the National Credit Code, which the Australian Financial Review states means loan providers must give their customers at least 20 days’ notice before their repayments relating to a loan change.
ME Bank’s alleged breaches are said to have occurred between 2 September 2016 and 3 September 2018.
ASIC has stated it won’t release any more information on the charges until the first court hearing on the matter – for which a date is yet to be set.
Bank of Queensland share price snapshot
Despite today’s fall, the Bank of Queensland share price has been performing well on the ASX lately.
Currently, the Bank of Queensland share price is up 17.13% year to date. It’s also gained 67.36% since this time last year.
The bank has a market capitalisation of around $5.6 billion, with approximately 639 million shares outstanding.