iSignThis-ASX war of words escalates

17 June 2020

The feud between payments and know-your-customer services provider iSignThis (ISX) and the Australia Securities Exchange (ASX) has rumbled on, after ISX refused to provide the ASX with correspondence with shareholders over potentially delisting the company from the exchange.

ISX and the exchange have been in dispute dating back to October 2019, when the company’s shares were delisted from the ASX.

The provider said it was not given a reason by the ASX for the move and launched legal action in December as a result.

On Friday (12 June), ISX disclosed that 55 shareholders, representing 16.1% of voting rights, had called for a resolution for the company to “seek its removal from the official list of ASX as soon as possible”. when the shares are reinstated. Under rule 3.17 for ASX listing, all companies must disclose when shareholders representing more than 5% of voting rights make a requisition.

The ASX then, in an email to the directors of ISX, requested copies of the shareholders’ correspondence with the board in which it made these requisitions. It cited rule 18.7 of its listing requirements, which says that “an entity must give ASX any information, document or explanation that ASX asks for to enable ASX to be satisfied that the entity is and has been complying with the listing rules”.

However, ISX refused to provide this, with chief executive John Karantzis arguing that “the ASX has no basis” to make the request, and said that to do so would violate the principles of anonymous voting.

“The listing rule does not require disclosure of each person requisitioning the notice, nor the voting intentions of private shareholders to be disclosed to the ASX,” Karantzis said in a letter to ISX shareholders. “I'm sure that this would be understood as a basic principle of a democratic society, and that any reading of the ASX listing rules will demonstrate that seeking this data is an overreach by the ASX.”

ASK meanwhile, has maintained that rule 18.7 gives it the power to request the information and said that “this latest breach of listing rules will act as a further impediment to the reinstatement of ISX’s shares”.

In the letter to shareholders, Karantzis added that “de-listing the company is an option that we may consider post the court case, as it is clear that the ASX will continue its malicious persecution of the company whether we are successful or not”.

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