There has been a development in the legal proceedings between iSignthis Ltd (ISX) and the Australian Securities Exchange (ASX), with the Federal Court of Australia denying the payments identity company interlocutory relief in its legal case against the ASX.
As Finance Magnates reported, earlier in the month iSignthis and ASX both pleaded their case over a suppressed ASX Statement of Reasons, which provided the exchange’s reasoning as to why it suspended iSignthis trading back in October of last year.
ASX reasons for suspending iSignthis trading
Following on from the Court’s decision, ASX has since posted its Statement of Reasons, which states that the exchange suspended trading following “speculation in the media as to whether ISX’s revenue for the six month period ended 30 June 2018 (‘Relevant Period’) had met the milestones required to trigger the conversion of certain performance shares held by iSignthis Ltd, an entity associated with ISX’s board and management, into fully paid ordinary shares in ISX (‘Ordinary Shares’).”
According to ASX, this, alongside accompanying volatility in ISX’s share price, a preliminary review into ISX’s announcements which identified that the company was providing services to cryptocurrency exchanges, and advice from ASIC that it was considering launching a formal investigation into the payments identity company, among other reasons, is why it suspended trading in ISX.
“These matters raised concerns for ASX as to whether ISX was in compliance with its obligations under the Listing Rules and whether trading in ISX shares was taking place in a properly informed market,” the Australian exchange said.
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“ASX therefore determined that it should commence its own investigation into ISX’s compliance with the Listing Rules. In consultation with ASIC, ASX also determined that it was appropriate to suspend trading in ISX shares with immediate effect under Listing Rule 17.3, pending the outcome of ASIC’s and ASX’s enquiries.”
iSignthis expects to vindicate its position at trial
Although disappointed with the verdict, iSignthis said in a letter to its shareholders that it intends to continue prosecuting its case in the Federal Court of Australia and expects to vindicate its position at trial.
“While disappointed not to be granted an injunction against the release of the ASX’s “Statement of Reasons”, which the Company argued contains a number of erroneous and unwarranted conclusions, ISX welcomes a number of statements from Her Honour Justice Jennifer Davies in the judgment,” iSignthis said in the letter.
“In paragraph 37 of the judgment her Honour said: ‘I accept that the evidence before the Court shows a serious question to be tried in respect of the accuracy of particular findings made by ASX as detailed in its statement of reasons. ASX did not contend to the contrary’”.
Following the judgement, iSignthis will comply with ASX’s directions provided on the 16th of February 2020. The company expects that after meeting the written directions of the exchange, as well as the voluntary escrow of the milestone performance shares, the ASX will allow it to recommence trading of its securities.