Billion-dollar tech stock iSignthis clarified how its controversial founder and chief executive John Karantzis apparently doubled his shareholding overnight to a stake worth more than $481 million – the additional shares are owned by his wife.
It means the couple own more than 41 per cent of the former tech darling which has been suspended from trading since October last year while the ASX and the Australian Securities and Investments Commission (ASIC) investigate the company which provides payment processing and verification services.
The latest iSignthis annual report revealed Mr Karantzis owned 450.3 million shares as of January 1, 2019. But his last directors' interest notice lodged with the ASX in September last year reported that Mr Karantzis owned just 227.9 million shares.
An iSignthis spokesman pointed out that the annual report declaration includes shares owned by directors like Mr Karantzis but also includes "personally related parties". In this case his wife.
iSignthis chief executive John Karantzis has a $480 million stake in the company locked up as its suspension from trading continues.
The share ownership is academic unless iSignthis wins its court battle against the ASX and successfully lifts the trading suspension on the stock.
In its statement of claim filed in the Federal Court in December, iSignthis claimed the ASX's failure to lift the suspension on four occasions following the company's response to queries was "an improper exercise of power" and "failed to accord procedural fairness to iSignthis".
The court documents revealed details of a letter sent by iSignthis chairman Tim Hart to ASX chief executive Dominic Stevens on October 28 last year stating "the diversity and disjunctive nature of the information sought gave rise to a reasonable inference that ASX was looking to find a problem, rather than acting on a suspected problem".
He said iSignthis was concerned the market operator was making decisions to continue the suspension that took into account "irrelevant considerations or were being exercised for an improper purpose".
According to the documents, iSignthis expressed concern that information requested by the ASX had been leaked and received by a short seller.
ISignthis also alleged that ASX would not give confidentiality undertakings on sensitive commercial information that the company was forced to submit.
The company is seeking damages and costs against ASX which denied the allegations in a statement of defence last month. The ASX said in its statement the iSignthis suspension is in ASX's "absolute discretion" and its powers to suspend "is not to be exercised for the purpose of punishing listed entities".
The ASX statement said the circumstances giving rise to the company's suspension were well known to it and "these reasons included matters relating to compliance by iSignthis with listing rules relating to continuous disclosure and security issuance".
Queries from the ASX have focused on the company's June 30, 2018 interim financial performance that delivered 337 million shares to iSignthis insiders.
On one ASX query, iSignthis conceded it had made a mistake and misclassified most of its revenue in its half-year disclosure ending 30 June 2018, presenting one-off revenue as recurring.
The company has confirmed the Australian Securities and Investments Commission (ASIC) is also investigating whether it met its continuous disclosure obligations during 2018.
ISignthis had a dream stock market run last year which saw its share price rise more than 10-fold from 14¢ to a record intraday high of $1.765 in September. It was suspended from trading indefinitely the following month.Source: Read Full Article