ASX Reveals Reasons for Not Disclosing ISX Independent Expert Review

ASX does not agree that the Executive Summary of the review contains the findings of the Independent Expert.

The Australian Securities Exchange (ASX) has recently released a statement regarding iSignthis Ltd (ISX), namely, clarifying the questions it was asking the Independent Expert regarding its recent review of the payments identity company.

In particular, ASX said that it was clarifying the scope of the review and seeing if it complied with Direction 2 – which required ISX to engage an acceptable independent expert to review the company’s policies and processes to comply with listing rule 3.1 and to assess each contract entered into since the 1st of January 2018 to determine whether any additional contracts should have been disclosed under listing rule 3.1.

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On the 20th of July, 2020, Clayton Utz provided responses to those questions, the exchange said, and on Wednesday, the Australian exchange has asked a follow-on question in relation to the scope of their review. Namely, in relation to their review of ISX’s disclosures in relation to Visa.

ISX claims ASX was blocking review being published

As Finance Magnates recently reported, earlier this week, ISX released the Independent Expert review conducted by two partners of Clayton Utz, which was an approved company by the ASX.

Following the completion of the review, iSignthis was required to publish the full findings, so they were available to the public. However, on Monday, ISX accused the exchange of blocking it from publishing the findings.

In its statement published yesterday, the ASX explained its reasoning as follows: “ISX sought to release a copy of the Executive Summary of the Independent Expert’s Report on the ASX market announcements platform. ASX notes ISX’s view that the Executive Summary contains the “findings” of the Independent Expert. ASX does not agree with this view. ASX considers that the Independent Expert’s Report contains findings that are not addressed in the Executive Summary.”

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John Karantzis iSignthis (ISX)
John Karantzis – CEO of iSignthis

Speaking to Finance Magnates, John Karantzis, Managing Director, iSignthis Ltd, said: “In October 2019 trading in our shares was suspended by the ASX  for share price volatility. The Independent Expert Report clearly finds that none of the transactions it examined were material to the share price of the company. Now the ASX is relying upon events from May this year to justify a suspension in October of last year. Our shareholders deserve better than this.”

Focus on Visa

The events occurring in May this year is referring to the issues the company has had with Visa. In particular, on the 24th of May, ISX announced that it was ending its contractual relationship with Visa as a principal member.

According to the company’s statement at the time, iSignthis decided to end the agreement due to the proposed rules by Visa, which are set to come into effect in October of this year, because they will restrict trade and competition.

The announcement came after iSignthis was suspended from Visa earlier in the month, with the payment giant’s website showing that the suspension was done by its anti-money laundering division. However, ISX has rejected entirely that it has at any stage processed unlicensed operators. ASX directed the payments identity company to conduct the Independent Expert review on the 1st of May. 

Continuing suspension

The ASX also highlights what conditions iSignthis must satisfy before the exchange reenlists its shares. Namely, the exchange said the company has yet to provide a satisfactory response to its query letter regarding disclosures in relation to its arrangements with Visa and failing to provide the information requested by ASX in relation to certain shareholder requisitions.

However, it is worth pointing out that shareholders of ISX recently voted to leave the ASX in its annual general meeting, with nearly 95 percent in favor of leaving Australia’s principal securities exchange. Excluding directors, 87.46 percent of shareholders still were in favor of leaving the ASX.

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