The Central Bank of Ireland has written to EML Payments, warning the company that its Irish subsidiary PFS Card Services Ireland Ltd has made limited progress with a remediation program and there are “significant and ongoing deficiencies remaining”. The CBI said it was not satisfied with PFS’s plan to remediate its anti-money laundering and counter-terrorism financing controls and was sceptical about its timetable for completion. This is a serious blow for EML chief executive Emma Shand, who took on the job of turning the company around last July, and Luke Bortoli, whose appointment as chair was only confirmed on Friday. Shand laid out an ambitious transformation plan for the business in November and last week committed the company to completing remediation work in Ireland and the UK by the end of this year. She is unlikely to meet that deadline. EML has been subject to regulatory intervention by the CBI since May last year over PFS’s compliance failings. The CBI was concerned about the elevated risk of money laundering and terrorism financing within the business, as well as the poor quality of its risk management framework and governance. EML disclosed on Friday that the CBI notified PFS that it may issue a direction that growth in payment volumes for the period from March 2023 to March 2024 be restricted to no growth above a 2022 baseline. The current restriction, imposed in December, is 10 per cent growth applying until December 2023. The EML board said in a statement: “The board is disappointed with this development. The reconstituted board is taking the concerns of the CBI very seriously. It is committed to remediating the issues that are of concern to the CBI.” It has established a board sub-committee, chaired by new non-executive director Peter Lang, to oversee the remediation program. In its December half accounts, EML recognised an A$86.2 million impairment expense to the carrying value of PFS, which was acquired in 2020 for $252 million. It also recognised a $35.1 million impairment expense to the carrying value of another overseas subsidiary, Sentenial Group, which was acquired in 2021 for $109 million plus a potential earnout of $62 million. The write-downs tipped the company into loss. It made a loss of $129.9 million in the December half, compared with a loss of $12.1 million in the previous corresponding period. In its statement on Friday, the company said it may write down PFS’s carrying value further.