ASIC confirms iSignthis probe extending back to 2018

The corporate regulator has confirmed it is formally investigating the billion-dollar tech stock iSignthis over suspected contraventions of continuous disclosure provisions dating back to April 2018. This was just months before it controversially awarded company insiders shares worth hundreds of millions of dollars.

In its annual report released late last week iSignthis said it remains under investigation by the Australian Securities and Investments Corporation (ASIC) for suspected contraventions during the period April 1, 2018 until the ASX suspended it from trading indefinitely on October 2 last year.

The company said charges, fines and penalties could apply but it "holds no provision for this matter, as the outcome is so uncertain, no reliable estimate can be made".

A cavalcade of iSignthis customers have run afoul of regulators both in Australia and internationally amid allegations they are linked to unregistered online trading schemes.Credit:Bloomberg

ASIC confirmed the veracity of the report on Monday but declined to comment.

ISignthis, which provides payment processing and verification services, was suspended in October last year amid inquiries from the ASX and ASIC.

Queries from the ASX have focused on the company's June 30, 2018 interim financial performance which delivered 337 million shares to iSignthis insiders such as chief executive John Karantzis.

The latest annual report raises questions about how many shares Mr Karantzis actually owns.

According to the 2018 annual report he owned 153.15 million shares as of December 31, 2018. However, the latest annual report reveals he owned 450.3 million shares on January 1, 2019.

The latest directors' interest notice lodged with the ASX reports that Mr Karantzis last year stated he holds about 227.9 million shares.

ISignthis has been asked for comment on the apparent discrepancies.

The company 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. 

ISignthis has taken legal action against the ASX to have the suspension lifted and said it has direct evidence of the impact of the ASX suspension on its business performance.

The company said it was seeking regulatory intervention to "address the potential anti-competitive practices of the ASX".

Last week iSignthis announced a tie-up with ASX rival the NSX, in a deal that would give it a cornerstone stake in the bourse and installs it as a key technology provider.

The NSX will raise up to $5.8 million from investors and contribute up to $3.8 million cash into the joint venture, while iSignthis will provide its technology and services.

ISignthis plans to take an initial 13 per cent stake in the NSX via a $4.2 million placement at 14.5¢ per share.

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