Timetable for mediation and trial
In February 2024, the Court made orders timetabling the class action up to trial. Mediation is scheduled to take place by 30 May 2025, however if the matter does not settle, it will proceed to trial, commencing on 4 August 2025.
Group Costs Order Awarded
In November 2022, the Supreme Court of Victoria approved a Group Costs Order (GCO) at a rate of 24.5%. This means that the legal costs of the EML Class Action will be calculated as 24.5% of the amount of any settlement or judgment awarded in the case, unless varied by the Court at a later stage. By awarding the GCO, the Court recognised that the order was appropriate or necessary for justice to be done in the proceeding.
A GCO allows legal costs to be calculated as a percentage of the amount of any judgment or settlement that may be recovered in the proceeding, on the basis that Shine Lawyers accepts the risk of paying EML’s legal costs if the case is unsuccessful. Group Members will not be exposed to any out of pocket costs as a result of their participation in the class action.
What is the EML Payments Shareholder Class Action about?
The EML Payments Shareholder class action alleges that EML mislead the market regarding compliance with Anti-Money Laundering / Counter Terrorism Financing laws in Ireland by its subsidiary, PFS Card Services Ireland Limited (PCSIL), who was operating in Ireland.
A timeline of relevant market announcements is outlined below, but in summary, commencing on 19 May 2021, EML disclosed to the market that the Central Bank of Ireland, the Irish regulator for Anti-Money Laundering / Counter Terrorism Financing, had raised concerns with respect to PCSIL’s risk and control frameworks and governance. In August 2021, EML announced that it had provided the Central Bank of Ireland with a remediation plan to be substantially complete by the end of 2021 with some remaining items to be remediated by the end of March 2022. Subsequently, in November 2021 the Central Bank of Ireland informed PCSIL and EML that it was minded to use its powers to restrict PCSIL’s growth until remediation efforts had been concluded. In December 2021 the Central Bank of Ireland issued this direction restricting growth. EML made representations to the market regarding the timing of the remediation program and the likelihood of the growth restrictions being lifted. In July 2022, EML announced to the market that its remediation efforts remained ongoing and expected its remediation to be completed in 2023. In short, it is alleged that the timing and cost of the remediation program was not appropriately disclosed to the market, thereby misleading investors.
This class action seeks compensation on behalf of EML shareholders who suffered loss as a result of EML’s alleged misleading and deceptive conduct and breach of continuous disclosure obligations.
Background to the EML Payments Class Action
The following timeline highlights the series of events that led to the drop in market value of EML’s shares:
13 May 2021
EML and its subsidiary, PFS Card Services Ireland Limited (PCSIL), received correspondence from the Central Bank of Ireland (CBI), raising significant concerns in relation to PCSIL’s Anti-Money Laundering/Counter Terrorism Financing practices, risk and control frameworks, and governance structures.
17 May 2021
EML shares were placed in trading halt at the request of EML.
19 May 2021
EML announced via the ASX concerns raised by the CBI. However, the company remained committed to its earlier projected results for FY21. Excluding the uncertain costs and impacts, EML anticipated FY21 revenues between $180 million and $190 million and EBITDA between $50 million and $54 million.
7 June 2021
EML announced via the ASX that the CBI Issues were expected to have only a minor impact on its financial performance, with relatively minor one-off costs ($2 million approximately) being the main consequence.
17 August 2021
EML announced via the ASX its implementation of a remediation plan for the CBI Issues which would satisfy the concerns of the CBI. EML targeted substantial completion of the plan by 31 December 2021, and balance by 31 March 2022. EML stated it was unlikely to incur financial impacts beyond an updated $11.4 million provision for remediation plan costs, and there was a restriction of material growth of PSCIL. EML provided financial guidance for FY22, projecting GDV of $93 billion to $100 billion, revenue of $220 million to $255 million, EBITDA of $58 million to $65 million and NPATA of $27 million to $34 million. The Company indicated that its FY22 guidance would not be affected by the CBI Issues.
7 October 2021
EML announced via the ASX that PCSIL had received further correspondence from the CBI regarding concerns about PCSIL and potential directions, including the remediation plan and material growth, which EML considered could materially impact the European operations of its Prepaid Financial Services business. EML repeated its remediation plan remained on track, and said nothing further about its FY22 guidance or financial impacts beyond the $11.4 million provision for remediation plan costs.
17 November 2021
EML held its AGM. An ASX published transcript confirmed EML was solidly progressing the remediation plan to comply with the 31 December 2021 deadline (residual issues by 31 March 2022) and once fully implemented PSCIL would meet or exceed the CBI’s expectations. EML said whilst CBI had “not identified any instances of financial crime, AML or CTF events... unless control frameworks are to the CBI’s expectations, then an unacceptable risk of AML/CTF exists”. EML also said it had responded to CBI’s 7 October 2021 correspondence and it was committed to fast tracking the remediation program with the CBI. EML did not address FY22 guidance, along with financial impacts beyond the $11.4 million provision for remediation plan costs.
25 November 2021
EML announced via the ASX the remediation program remained on track and EML/PSCIL boards were committed to implementation of the remediation plan. The FY 2022 Guidance issued on 17 August 2021 was not modified or qualified in any way.
16 February 2022
EML announced via the ASX record GDV of $31.6Bn and Revenues of $114.4m for FH FY 2022. EML reaffirmed its FY22 guidance, projecting GDV between $811 - $88 billion (FY 21 of 19.7 billion), a revenue range of $230 to 250 million, gross profit margin of $~69% (up 2% on FY21, overheads between $103 million to $112 million (up 24-46% on FY21), underlying EBITDA between $58 to 65 million, and underlying NPATA forecasted between $27million to $34 million, (down 17% - up 5% on FY21), and FY 22 would benefit from among other things, launching of new European programs in December 2021 as CBI license restrictions eased.
26 April 2022
EML announced via the ASX, downgrading its FY 22 forecasts: GDV downgraded to $79 billion - $84 billion (from $81 billion to $88 billion), Revenue downgraded to $225 million to $235 million (from $230 million to $250 million), EBITDA was downgraded to $52 million to $55 million (from $58 million to $65 million, an 8% reduction), NPATA was downgraded to $27 million to $30 million (from $27 million to $34 million).
25 July 2022
EML announced via the ASX CBI had identified shortcomings in the remediation program and that there was more work to do. CBI was not satisfied with the sequencing approach taken to risk assessment of PSCIL's distributors, corporates and customers. The necessary adjustments by PSCIL would extend the remediation program being finalised in 2023, and PSCIL had been operating under a material growth restriction due to expire in early December 2022.
Frequently Asked Questions
What is a class action?
What is a class action?
When Governments, large companies or institutions do the wrong thing and people are harmed or suffer loss as a result, an individual can have little to no means of bringing a legal claim.
Class actions are an important mechanism within Australia’s legal system that allow large groups of people to come together to pursue a claim collectively.
For a class action to take place, there are three criteria that need to be met:
there must be 7 or more people that have claims against the same defendant; and
the claims relate to the same or similar circumstances; and
the claim must relate to at least one common issue of law or fact.
For more information about how class actions resolve, click here.
How long do class actions take to resolve?
How long do class actions take to resolve?
It can take up to several years for a class action to resolve. The time taken from case commencement through to resolution and settlement administration depends on the particular case, and the nature of the claim.
For more information about class actions and how they work, click here.
Does it cost anything to join a class action?
Does it cost anything to join a class action?
Shine Lawyers is committed to ensuring that everyone, regardless of their background or financial situation, has access to justice. We run our class actions in a way that means you are not exposed to any costs or financial risk, so joining a class action will cost you nothing.
When a class action is successful, the legal fees and costs to run the class action are deducted from the settlement amount that is approved by the Court. If the class action is unsuccessful, we will ensure there are no out-of-pocket costs to you.
Will my contact details be kept private?
Will my contact details be kept private?
Yes, your contact details will remain confidential and we will seek your consent before disclosing any of your personal information (including before such disclosure is required by the Court).
Shine Lawyers will only use your personal information strictly for the purpose of the legal proceedings.
Meet the EML Payments Shareholder Class Action team
Shine Lawyers’ EML Payments Shareholder Class Action team includes some of the firm’s most experienced litigators, solicitors and support staff. You can learn more about the team running this class action by clicking on their profile below.
Why Choose Shine Lawyers?
In successful settlements and judgments
We have secured more than $1 billion in class action settlements and judgments for our group members.
years of collective experience
Our team includes the country’s most experienced class actions experts and litigators with the skill, industry insight and dedication to deliver the best possible outcomes for deserving Australians.
dedicated class actions team members
We are proudly one of the largest class actions teams in the country. Our senior practitioners are supported by a dedicated team devoted to the complex field of class actions.
