The wizz-kid founders of Australian ‘buy now, pay later’ pioneer Afterpay are selling down their stock alongside a capital raising announced to the Australian Securities Exchange on Tuesday.

Afterpay will seek to raise a minimum of $300 million from “eligible investors” to support its ambitious international growth plans, with a floor price of $21.75 per new share, which is a 10% discount on Afterpay’s closing price on Friday 7 June.

Separately, co-founders Nick Molnar and Anthony Eisen will be selling 2.05 million shares each to US-based private equity outfits Tiger Management and Woodson Capital. Afterpay executive director David Hancock will also be selling 400,000 shares as part of the deal.

Despite the sell-down, the two co-founders will still be Afterpay’s largest shareholders, holding approximately 20.5 million shares, or 8.1% of the issued stock, each.

Afterpay has entered a trading halt and plans to raise the full $300 million from institutional players with any shortfall to be picked up by Tiger and Woodson, according to a statement to the ASX.

The move comes hot on the heels of new retail partnerships with iconic US retailers Ray-Ban, Levi’s, O’Neill and Tarte Cosmetics, along with updated US market footprint figures which indicated as many as 1.5 million Americans have used the Afterpay product when shopping.

But while Afterpay announced the US business update to the global press, it did not provide any formal statement to Australian stockmarket investors until the next day — a decision which caught the attention of the ASX.

ASX official Dean Litis, who is a principal adviser in the exchange’s listings compliance department, wrote to Afterpay’s lawyer on 6 June to investigate.

Litis pointed out that Afterpay’s share price opened at $23.03 and surged to $24.57 before closing at $23.90 on 5 June after several media outlets, including Business Insider Australia, covered the retail partnerships announcement.

The letter, seen by Business Insider Australia, highlighted a number of ASX rules before asking: “Does [Afterpay] consider the information to be information that a reasonable person would expect to have a material effect on the share price or value of its securities?”

A response from Afterpay general counsel Christopher Stevens — made public at 3:42pm local time on Friday before the long weekend — rejected any suggestion that the update was “material” and required disclosure since the numbers were in line with projections announced to the ASX in January and February.

“Any other interpretation of the materiality of the information could lead to a conclusion that a fast-growing business like Afterpay would have to make very frequent announcements about ordinary, business-as-usual operations,” Stevens responded.

The capital raise and sell-down also comes as Australia’s financial intelligence agency, AUSTRAC, is investigating Afterpay for potential non-compliance with anti-money laundering and counter-terrorism financing laws.

Corporate regulator ASIC has also raised issues with Afterpay’s business model, leading to a parliamentary inquiry into payday lenders and ‘buy now, pay later’ schemes in 2018.

This article first appeared on Business Insider Australia, Australia’s most popular business news website. Read the original article. Follow Business Insider on Facebook or Twitter.