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- humm group (HUM) has disclosed potential historic exposure to a company facing legal proceedings from Westpac (WBC) concerning more than $200 million in potentially fraudulent activity
- Forum Finance was linked to humm’s now decommissioned managed services business between 2016 and 2018
- humm estimates its potential exposure could be up to $12 million, but affirms the funds have not been confirmed as fraudulent at this stage
- Westpac says the potential fraud is sophisticated and appears to have been perpetrated externally
- humm group shares were down 3.47 per cent and trading at 97.5 cents at 1:12 pm AEST.
humm group (HUM) has disclosed potential historic exposure to a company facing legal proceedings from Westpac (WBC) concerning more than $200 million in potentially fraudulent activity.
The potential connection to financial services firm, Forum Finance, was via flexigroup’s Managed Services generated business, which was linked to the firm between 2016 and 2018.
humm estimates its potential exposure could be up to $12 million, but affirmed investigations were still ongoing and these funds had not been confirmed as fraudulent.
humm also advised that the majority of the assets associated with flexigroup Managed Services were sold to a third party and transferred off humm’s balance sheet in 2018.
The disclosure comes after Westpac quietly delivered an announcement on July 2 advising it had commenced civil proceedings against Forum Finance relating to a $200 million exposure to potential fraud.
“This is a complex issue, and we are working at pace to address it, including engaging with the police and regulators. At this preliminary stage, the potential fraud is sophisticated and appears to have been perpetrated externally,” the Westpac statement read.
Westpac said the potential fraud related to a portfolio of equipment leases with its customers arranged by Forum Finance, which were referred to Westpac’s Institutional Bank.
humm group shares were down 2.47 per cent and trading at 97.5 cents at 1:12 pm AEST.
