Afterpay founder resigns as millions of shares become tradeable

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Afterpay founder resigns as millions of shares become tradeable
By Lucy Battersby and Sarah Danckert
October 9, 2019 � 12.32pm
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One of the original directors of buy-now, pay-later group Afterpay Touch has
resigned from the board of the regulatory-challenged company, just as millions of
dollars worth of shares available to him emerge from voluntary escrow.

David Hancock announced his resignation on Tuesday evening after the market closed.
The escrow period was an agreed time-frame during which he wasn't able to access
his shares and sell them.

Afterpay group head David Hancock is leaving the company.

Afterpay group head David Hancock is leaving the company. CREDIT:LOUIE DOUVIS

He will remain as a consultant to Afterpay, which is subject to a major money-

laundering and anti-terrorism financing investigation by the Australian financial
crime watchdog AUSTRAC.

Mr Hancock's final director shareholding announcement shows he has options over

Afterpay shares that will allow him to buy millions of the group's shares - that if
exercised at today's price are worth $99 million - for only $7.5 million.

None of the shares are currently in escrow meaning they can be sold on market by Mr
Hancock if he wishes to do so.

He also owns a further ordinary 950,000 shares, which are worth $32.5 million at
today's price. None of the shares are in escrow, meaning they can be sold on market
by Mr Hancock if he wishes to do so.

As Mr Hancock is no longer a director of Afterpay and his holding is less than 5

per cent of the company's stock he will not be required to notify the market of any
future share sales.

The market has been keenly watching for any share sales by Afterpay's founders
following a $100 million share sale by Mr Hancock and the two other founders Nick
Molnar and Anthony Eisen in June this year amid the AUSTRAC investigation.
On June 11, Afterpay said the three founders would not sell any shares for 120 days
as a form of voluntary escrow.

Mr Hancock's resignation notice was filed on October 8 - 119 days after that
announcement. On July 2, Afterpay told the market that Mr Molnar and Mr Eisen had
committed to not selling any shares in the current financial year ending June 30,
2020.

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Mr Hancock made headlines last year when he resigned as the chairman of Freedom
Insurance group following revelations of alleged misconduct by the company and its
staff during the banking royal commission. Freedom representatives were accused
during the royal commission of allegedly bullying the son of a Baptist pastor with
Down Sydrome into buying junk insurance. Mr Hancock was not accused of any
wrongdoing involved in those allegations. Freedom is now in administration.

He has been an independent non-executive director since March 30, 2017, when
Afterpay and Touchcorp merged. Afterpay Touch listed on the Australian Securities
Exchange (ASX) in May 2016 at $1 per share and has had a rapid increase in value,
rising as high as $36.57 since then.

Mr Hancock's resignation was widely expected. The company told shareholders in its
annual report for 2019 that Mr Hancock would step down from the board at the
conclusion of the 2019 financial year matters.

"In line with his contractual arrangements, the role of group head will also come
to an end and David will facilitate the transition of his role to the CEO and MD
and other members of the leadership team over a period of up to 12 months."

Afterpay has been contacted for comment.

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BANKING PRODUCTS
AFTERPAY TOUCH GROUP
Lucy Battersby
Lucy Battersby
Twitter
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Lucy Battersby has covered trends, technology and telecommunications since joining
The Age in 2008.

Sarah Danckert
Sarah Danckert
Twitter
Email
Sarah Danckert is a business reporter.

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