It looks like shares in self-styled ‘paydentity’ business iSignthis Ltd (ASX: ISX) could be suspended for a fair while yet as the regulatory worries around the company balloon.
iSignthis shares were originally suspended by the ASX’s compliance and listings team on October 2 pending the resolution of multiple regulatory questions around the business.
Separately the financial services regulator ASIC is also looking into the business to paint a worrying picture for shareholders.
On October 28 iSignthis released some of its responses to the ASX compliance team’s queries around disclosure, revenue recognition and reporting. However, the stock remains suspended to suggest the regulators are not satisfied for now.
According to the company’s management team there’s nothing to worry about, but a month long suspension is highly unusual and suggests otherwise.
Other news reports have also questioned the credibility of iSignthis’s client base with regulators overseas and in Australia reportedly moving in on some of iSignthis’s old clients.
The latest media reports in the Times of Israel claim one of iSignthis’s historical Israeli clients is now being investigated by Israeli regulators.
There’s also the matter of a report from financial watchdog “Ownership Matters” that questions iSignthis’s disclosure over who owns shares in the company under what structures.
Given all the problems, I expect the shares will get smashed if they do return to trade.
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