(Recasts with capital raising, adds details from statement)
June 26 (Reuters) - Australian buy-now-pay-later company Afterpay Touch Group APT.AX said on Wednesday it is halting a $21 million capital raising as it waits to receive the recommendations of an audit ordered by the country's financial crime watchdog.
The Melbourne-based company said it provided the Australian Transaction Reports and Analysis Centre (AUSTRAC) three candidates to conduct a mandated external audit on it over suspected non-compliance with anti-money-laundering laws.
Afterpay said in a statement to the stock exchange it will defer its A$30 million ($20.87 million) share sale to existing investors until it considers the audit's recommendations. The raising was planned to top up a A$300 million underwritten placement earlier this month.
It said it "reserves the right" to not proceed with the capital raising.
Afterpay added that co-founders Anthony Eisen and Nick Molnar do not intend to sell any more shares in the next financial year after a filing to the Australian Stock Exchange revealed that the co-founders sold shares the day before AUSTRAC's announcement, pocketing about A$47 million each.
Buy-now-pay-later players like Afterpay let shoppers purchase products without paying upfront, and without the regulatory hurdle of applying for a credit card or loan. They make money by receiving fees from vendors and from late payment charges.
Earlier in June, AUSTRAC ordered Afterpay to hire an external auditor at its own expense and report back in 60 days on the findings, in a bid to spur new financial service players to take their money-tracking obligations seriously. said it would work closely with AUSTRAC and that it was taking the audit "very seriously". It has formed a sub-committee to oversee the external audit process and assist the board in its interacting with the government agency.
($1 = 1.4372 Australian dollars)