The ASX is on the verge of acting in breach of its duty to act reasonably and in good faith, counsel for iSignthis told the Federal Court yesterday in a dispute over the company's long-running suspension from trading.
It is now more than six months since the ASX - informed mainly by material it read in the media - suspended shares of iSignthis, a payments provider with banking aspirations.
In the interim, iSignthis has pushed into market segments that make it a direct competitor to the ASX, through its ClearPay service.
John Karantzis, CEO of iSignthis, is even now doing double duty as joint CEO of NSX.
The ASX are considering publishing a document setting out their reasons for the iSignthis trading suspension, and iSignthis are seeking an injunction from the Court to prevent this.
The legal mission of iSignthis is epic; being in part to bulldoze aside the broad power set out in ASX Listing Rule 18.8 that "facilitate compliance with the listing rules."
"It's not the proper practice of investigators to be running a public commentary on their avenues of inquiry or their unproven suspicions," Peter Collinson, advocate for iSignthis told a webcast hearing before Justice Jennifer Davies.
"We attack listing rule 18.8 not from one perspective as our friends I think are inclined to
emphasise, being that it's an invalid rule. That's certainly one attack.
"But the other attack is - even if the rule be valid - its invocation in the circumstances of this case caused ASX to breach its duty to act fairly and reasonably and in good faith, which we say is an obligation implied in the listing rules."
Collinson went on to make clear that the commercial interests of iSignthis may be affected were the ASX's draft reasons made public; the draft, he said "identifies particular transactions in which iSignthis is involved, which it legitimately fears would be adversely affected by the publication of what ASX wants to publish."
The ASX, Collinson argued, "tries to argue for some reputational damage … that there's going to be a loss of market confidence in its ability to enforce the listing rules. That sounds like a floodgates argument.
"What seems to be suggested is that if this application were to succeed, then all listed entities have a roadmap to decline to comply with the listing rules … Force ASX to go to court and undermine the integrity of the market."
In reply, Catherine Button for the ASX, told Justice Davies that if she granted the injunction it risked grave "reputational damage to the ASX, if it's unable to exercise its powers."
iSignthis, Button said, "is not an entity that has an unblemished reputation as far as press reporting is concerned."
Button said the ASX had received an abundance of correspondence asserting bias for the lengthy suspension of iSignthis shares, going on to reference postings at the share gossip website HotCopper - seriously, and apparently the ASX affidavits are thick with HotCopper content.