UPDATE: Afterpay shares (ASX: APT) closed the day down just over 12 per cent.
Shares in buy now, pay later service Afterpay have fallen more than 13 per cent today after the company announced it will face an external audit in to its compliance with laws relating to money laundering and terrorism financing.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) has identified several concerns for the external auditor to examine, including the company’s verification of customer identity and reporting of suspicious matter.
Afterpay has two weeks to supply its three nominees for the appointment to AUSTRAC who will then decide on the auditor.
The auditor will examine incidents going back as far as January 2015, and has 120 days to provide a full report to AUSTRAC with a preliminary report after 60.
Afterpay mentioned the possibility of an audit last week.
The company filed a trading halt earlier this week before revealing on Wednesday it had raised a further A$317.2 million.
AUSTRAC CEO Nicole Rose said the appointment serves as a reminder to new financial services of their obligations and that they must take the Anti-Money Laundering and Counter-Terrorism Financing laws seriously.
“The audit will help identify if Afterpay has developed and implemented the systems and controls it needs to ensure it complies with its obligations,” Ms Rose said.
“These laws are in place to protect businesses, the financial system and the Australian community from criminal threats.”
“AUSTRAC will continue to work with Afterpay to assist the company to mature and strengthen its compliance processes, staff training and suspicious matter reporting, but we will not hesitate to take action where an organisation is failing to appropriately protect itself and Australia’s financial system from criminal activity.”
Afterpay will be forced to pay for the audit and AUSTRAC will determine the extent of it.
