@RodeoshowPost #:44968022By now, everyone should know that I do NOT suggest that ISX should not be investigated. ISX does need to be able to prove ISX has acted within the law. But this is not the spirit of the ASX investigation. There is a serious question of whether ASX even considers ISX's explanations because ASX is so convinced in their own minds of ISX guilt.
When ASX use their legal powers to publicise every supposition, innuendo and suspicion, most of which are just that - a supposition, innuendo, suspicion, and do not use their discretionary powers to investigate in private, something is very wrong. Any reasonable person would know that due to the volume of the questions asked that it would potentially, even if the answers show no wrongdoing, destroy the reputation of the entity being questioned. This begs the question - is this ASX's intention?
But there is a reasonable question and potential evidence as to whether ASX is searching for a reason to convict. For example, in ASX's SOR, there are examples of ASX searching for the principle to be able to convict ISX of an infraction. Again, there is a serious question of whether there is something morally wrong with this approach.
The following is an example of ASX searching for a possible reason which would support a conviction of ISX. ASX, in this example, is trying to prosecute the idea (feeling, instinct....) that ISX has earned the milestone shares illegally. ASX indicates by it's very own hand that it is trying to find the appropriate rule that would support this. ASX goes through (IN THE SOR DOCUMENT!) a number of scenarios that might work, and when the reasoning doesn't work, goes back to their original "idea" of what will work. This indicates that the important issue for ASX is that a scenario is found that will provide for a legal framework for a conviction. If no one else sees this as corrupt, I am definitely in the wrong place.
Following is the convoluted reasoning in ASX's final“reasons” document to find the appropriate means to convict ISX of the infraction. It really boggles the mind in its complicated andtortuous analysis. This is in section 9 – Were the Milestones validly met? ASX’s thought process raises concerns, and there is a reasonableargument, and there are serious questions to be determined as to whether ASX isgrasping for reasons to declare ISX in contravention of listing rules regardingthe performance shares. It goes like this (see if you can follow it, because it is truly remarkable!):
1.First ASX states “properly construed the reference to ‘revenue’in the Milestones meant ordinary business revenue and excluded revenuegenerated solely or predominantly for the purpose of meeting the Milestones. (My comment: ISX’s answer to this is valid – ISX is a technology company and ISX constantly integrates customers. In addition to this, when the performance shares were approved by Otis Energy in 2014, the fact that revenue = turnover had been explained as well as the risk. Additionally, this had been approved by ASX.)
2. Then ASX argues that it could not reasonably have been in contemplation of the Otis Energy (OE) shareholders when the terms of the Performance Shares were originally agreed. (My comment: This is not true since it was made very clear in the Notice of general meeting before the vote that revenue meant turnover to OE in 2014).
3. Then ASX argues (as if they know that maybe 1 & 2 won't work), but ASX breached Listing rule 10.11 which states that unless one of the exceptions in rule 10.12 applies, an entity must not issue or agree to issue *equity securities to any of the following *persons without the approval of the holders of its *ordinary securities”. (My comment: ASX appears to be saying that unless an exception in 10.12 applied the milestone shares breached rule 10.11 and couldn’t be given to JK, directors or other related parties unless we shareholders voted for it (again) in 2018 even though it was voted and approved in 2014).
4.Ah! But there is a relevant exception in 10.12. Number 7 states 10.11 is not valid if the issue of the securities is resulting from the *conversion of *convertible securities ...after it was listed and complied with the listing rules when it did so. (My note: Which it was and it did. So this doesn't work!)
5. ASX also realises this and then admits this is probably so, therefore resorts back to argument 1 and then states “If it were ultimately determined that ISX did enter into...”.
W
I maintain there is a reasonable argument from this searching for a valid reason to convict and by stating “if it were ultimately determined that ISXdid enter into” that ASX has not determined this to be true and that they will continue until they find a situation under which ASX can convict.
Again, there is something ultimately immoral and wrong with this.
As I have said over and over: Investigate but take that investigation away from ASX and give it to ASIC. This is an example of why we cannot be confident that ASX will do the right thing.
