The Australian Takeovers Panel has issued a stinging assessment of Humm Group’s (ASX:HUM) corporate governance, labelling the company’s failure to disclose key recruitment details as "serious and concerning".
The watchdog is currently weighing further orders against the buy now, pay later provider following a breakdown in transparency regarding the appointment of a new independent director.
This escalation stems from a voluntary undertaking Humm entered into on Feb. 26.
That agreement was designed to resolve allegations of insider participation and the mishandling of board-level conflicts of interest.
Central to the undertaking was the creation of an independent board committee tasked with evaluating the $385 million takeover bid from Credit Corp (ASX:CCP) announced late last year.
The Panel’s frustration centres on Humm's lack of candour regarding its engagement of a recruitment consultant.
The Panel revealed that Humm had withheld information about its appointment of Campbell Howe prior to executing the February agreement.
Despite a formal letter from the Panel on 8 April objecting to Howe’s role, Humm proceeded to appoint Abigail Cheadle and Teresa Dyson to its board just two days later.
"Humm’s failure to inform the Panel is particularly grave given the company knew a declaration of unacceptable circumstances was imminent," the Panel stated.
The regulator emphasised that the initial undertaking was only accepted because it was believed to adequately address conflict concerns.
At the time of reporting, Humm Group’s share price was $0.62.