* Aims for majority independent board with independent chair
* Group head to depart within 12 months
* Co-founder and executive chair will become CEO
* Shares partly recover two-day losses sparked by Visa entry (Recasts, adds share movement, fund manager comments, context)
By Paulina Duran
SYDNEY, July 2 (Reuters) - Australia’s Afterpay Touch Group Ltd on Tuesday said it was moving toward appointing a “majority independent board with an independent chair”, as the fast-growing lender boosts governance amid scrutiny from the financial crime watchdog.
The announcement sent Afterpay’s shares up as much as 7.6% in Tuesday trade, partly reversing two days of heavy selling as investors fretted about U.S. credit card firm Visa Inc’s planned entry to the buy-now-pay-later market.
Investors have also been spooked since the Australian Transaction Reports and Analysis Centre (AUSTRAC) last month ordered an external audit of Afterpay due to suspected non-compliance with anti-money-laundering laws.
Against this backdrop, Afterpay on Tuesday said Executive Director and Group Head David Hancock will leave the firm after an up to 12-month handover, and that co-founder and Executive Chairman Anthony Eisen will become chief executive. Co-founder and CEO Nick Molnar will become global chief revenue officer.
The pioneer in buy-now-pay-later consumer lending also said independent director Elana Rubin will become interim chair until it fills the new role of independent chair.
“They are looking to improve the governance of the board with an independent chairperson, so these changes can only be positive,” said fund manager Damon Callaghan at ECP Asset Management.
As well as the management shuffle, investors may also be buying Afterpay stock on Tuesday due to a better understanding of the limited risk Visa poses, Callaghan said.
Last month, Afterpay raised A$317 million ($221.08 million) in new capital through a share placement, which involved both co-founders and Hancock selling a combined 4.5 million shares at A$23 each, equivalent to A$103 million.
AUSTRAC’s announcement followed the same week and sent the stock as low as A$19.9. It is currently trading around A$26.
“The co-founders are still heavily involved in the business and committed to not selling shares in the near term,” Callaghan said. ($1 = 1.4339 Australian dollars)
Reporting by Paulina Duran in Sydney; Additional reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Richard Pullin and Christopher Cushing