Takeovers Panel accuses Humm of ‘serious and concerning’ conduct
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The news: The Takeovers Panel is considering further orders against buy now, pay later business Humm Group, after calling the company’s failure to inform the panel of its appointment of a recruitment consultant to find a new independent director “serious and concerning”.
The context: The panel accepted a voluntary undertaking by Humm on 26 February, following complaints of insider participation and management of conflicts of interests by the company.
As part of its undertaking, Humm was to establish an independent board committee (IBC) comprising non-conflicted, non-executive directors to consider the $385 million takeover proposal by Credit Corp, announced in December.
The panel said on Friday that “at no time prior” to offering or executing the undertaking did Humm reveal any information about its process to appoint an independent recruitment consultant.
On 8 April, the panel sent a letter to Humm stating that it did not agree with the company’s interpretation of the undertaking, and setting out its preliminary view that it was minded to object to the appointment of Campbell Howe as an independent recruitment consultant.
On 10 April, Humm announced the appointment of Abigail Cheadle and Teresa Dyson to its board, in a recruitment process run by Howe.
The panel concluded that when Humm provided the undertaking on 26 February it did not provide information of matters which were “directly relevant to the panel’s decision whether to accept the undertaking”.
What they said: “Humm’s failure to inform the panel of these matters at that time is serious and concerning given that Humm knew that the panel was prepared to make a declaration of unacceptable circumstances in relation to the issues of insider participation and management of conflicts of interest,” the panel said on Friday.
“Humm also knew that the panel did not make a declaration only because the panel considered that the undertaking adequately addressed its concerns in relation to these issues. Despite being aware of these matters, Humm did not disclose relevant information to the panel prior to offering and executing the undertaking.”
The source: ASX
