ISignthis, a provider of payment verification technology to help banks meets AML reporting obligations, has launched legal proceedings against the Australian Securities Exchange over the suspension of its shares
Trading in iSignthis shares was suspended in September, after proxy advisory and research group Ownership Matters raised questions about the company's disclosures and governance. The quality of the firm's customer base has also been under the microscope, with a quarter of its revenue derived from companies subject to regulatory action, a number of whom are facing criminal sanctions for allegedly running illegal trading scams.
In launching the legal case against ASX, the firm says that it has handed over almost 2000 pages of confidential documents dating back over three years.
Chief executive officer,John Karantzis says the ongoing suspension is harming the company's standing with investors, customers and suppliers.
He says that the interactions with the ASX during the last nine weeks raise issue of procedural fairness and good faith, as well as a substantive question about the actual reason for the suspension.
“We have taken this step in order to lift the suspension of ISX’s shares," says Karantzis. "We are acting in the interest of our shareholders, as they have been denied the basic right to trade our shares for too long.”
ISignthis is seeking compensation and declarations from the court, including that "ASX failed, in breach of the agreement, to accord procedural fairness to iSignthis and act in good faith and/or honestly and fairly and/or reasonably before suspending the quotation of its shares on the Australian Securities Exchange."
It also notes that Westpac, which is mired in a money laundering scandal, has been allowed to continue trading despite the cloud over its practices.
The irony that iSignthis is an Australian company with a technology platform that would have helped to prevent Westpac’s recent AML scandal is not lost on us," says the firm in a statement. "Whilst Westpac traded on, we were suspended."
ASX says that it intends to vigorously defend the action.