KinerjaPay Corp (OTCMKTS:KPAY), a digital payment and e-commerce platform said Wednesday that it was establishing business bank accounts to accommodate a sizable new investment in keeping with US federal banking regulations.
Delaware-incorporated KinerjaPay has filed a Form 8-K report to this effect updating the Securities and Exchange Commission. On January 8, the company indicated its acceptance of a $200 million subscription from Indonesia’s Wahana Group. It had signed up for $100 million in Series F and an additional $100 million in Series G convertible preferred stock, convertible at $1.80 per share, subject to a 9.99% blocker.
At the time, KinerjaPay said it expected to close the Wahana investment within 10 days. However, the company explained that due to the complexity of the US federal banking regulations, it was still in the process of establishing a new business bank account to “accommodate an investment of this size," which requires US banks to not only apply enhanced "Know Your Customer" rules but also Proof of Funds Source rules.
Over the past two weeks, the company said its executives had met with several major banks in New York to open one or more business bank accounts for KinerjaPay, a public reporting company with the SEC, to facilitate the acceptance of the $200 million investment.
KinerjaPay CFO Windy Johan said that “because of the size of this new investment from an Indonesian investor,” they have been engaged in providing several US banks proof that the funds were from “bona fide sources” from a major international bank with headquarters in London.
“The due diligence process resulted in the delay from our original estimate of 10 days. We believe that we are well-along with satisfying the due diligence required to establish one or more new banking relationships to accept the SWIFT transfer from our investor for $200 million," Johan said in a statement.
KinerjaPay chairman & CEO Edwin Witarsa Ng earlier told Proactive Investors the $200 million investment would “change everything” for the company which expected to grow in 2019 and work towards a Nasdaq Stock Market listing by 2020.
The American company which started in Indonesia is ready to grow its South-East Asian digital payments and microloans business while evaluating potential acquisitions over the next 12 months.
KinerjaPay’s services include the company’s KinerjaPay IP digital payments and e-wallet system (KPAY) and KinerjaFund (KFUND) microloan service. KinerjaPay’s focus is on regions with large un-banked and under-banked populations, and areas with minimal use of traditional credit cards.
"We are in the process of opening business bank accounts to accommodate the $200 million international investment," said Ng in a statement. "We want all of our investors and the public markets to understand that the company is following proper US banking procedures in order to maintain our compliance in all aspects with US federal banking regulations."
The Wahana Group is a firm whose investments include commercial and residential buildings throughout Indonesia, including Surabaya, which is the nation's second-largest city, as well as Bali. The firm has been working on planning for the expansion of Terminal 3 at the Surabaya airport.
"We remain confident and committed to the subscription arrangement and our belief in the potential of KinerjaPay. We understand that KinerjaPay's executive officers are expediting our investment by providing US banks with all supporting documents in order to accommodate our investment as quickly as possible,” said Rio Chandranegara, a representative from the Wahana Group. “We are here to fully support KinerjaPay until it is done."
The company expects to be able to receive the committed funds from the Wahana Group within the next 14 to 30 business days.
Since the adoption of the Patriot Act, US banking regulations call for rigorous due diligence as a prerequisite to opening new business accounts, especially when large sums are involved.
Contact Uttara Choudhury at [email protected]