LHC Capital, the only significant external investor in controversial ASX tech darling iSignthis, has supported the company in a letter to its investors on Monday and rebuked Australia's corporate regulators over the conduct of their investigation.In a quarterly update to investors on Monday, LHC executives Marcus Hughes and Stephen Aboud said they are comfortable with their iSignthis investment despite its shares being held in suspense.We do not yet understand why there was a need to place ISX into suspensioniSignthis investor LHC CapitalThey said that, based on the regulatory queries which have been made public so far, "we do not yet understand why there was a need to place ISX into suspension.""We question why the ASX cannot 'front-end load' its questions to expedite its investigations," said their update to investors.AdvertisementiSignthis was forced into an indefinite trading halt this month by the ASX and the Australian Securities and Investments Commission (ASIC) amid ongoing inquiries into the company.LHC said that while iSignthis is a business it has followed for many years, it remains poorly understood by the Australian investment community.Marcus Hughes of LHC Capital has backed iSignthis in its battle against Australian regulators.CREDITOMINIC LORRIMERLHC started the year with iSignthis shares worth $10.8 million. These shares were worth $137 million when the iSignthis stock price peaked last month.LHC pointed to the growth of iSignthis' gross processing transaction volumes (GPTV) on an annualised basis of $1.1 billion in August and $1.9 billion in September."This is explosive consecutive month-on-month-on-month growth in any language," said the report.RELATED ARTICLEREGULATIONISignthis confirms ASIC disclosure probe, defends conductAdd to shortlistAs iSignthis charges a fee on this GPTV it is an "important metric" for determining the trajectory of one of the company's main revenue drives, said the investor."Clearly, the outlook for ISX growth is very strong.""Our view is that iSignthis has now gone through the 'tipping point' in generating accelerating revenues, profits and cash flows. Such is the cash generation potential of this business, that we believe the company will be in a position to declare a maiden dividend to shareholders next year."iSignthis provides automated payment verification services to clients such as banks and brokers so they can meet "know your client" requirements under anti-money laundering regulations.RELATED ARTICLEPAYMENTSRegulators jam brakes on the iSignthis rollercoasterAdd to shortlistiSignthis has been under intense scrutiny after a dream run this year saw its share price rise more than 10-fold from 14¢ to a record intraday high of $1.765 last month.iSignthis's market value climbed to peak of $1.8 billion last month before its shares plunged after a report from shareholder advisory firm Ownership Matters.The report raised concerns about how the company managed to report revenue of $5.5 million for the half-year ending June 30 last year, a result that triggered the release of performance rights over 337 million shares to top executives.These shares would have had a market value that exceeded $550 million when the stock hit its record high last month.LHC said its view of the Ownership Matters report is that "its true impact was in the exquisite timing of its release" with iSignthis shares up, at that stage, by 171 per cent for the quarter to date.
ISX Price at posting:
$1.07 Sentiment: Hold Disclosure: Held
OMINIC LORRIMERLHC started the year with iSignthis shares worth $10.8 million. These shares were worth $137 million when the iSignthis stock price peaked last month.LHC pointed to the growth of iSignthis' gross processing transaction volumes (GPTV) on an annualised basis of $1.1 billion in August and $1.9 billion in September."This is explosive consecutive month-on-month-on-month growth in any language," said the report.RELATED ARTICLEREGULATIONISignthis confirms ASIC disclosure probe, defends conductAdd to shortlistAs iSignthis charges a fee on this GPTV it is an "important metric" for determining the trajectory of one of the company's main revenue drives, said the investor."Clearly, the outlook for ISX growth is very strong.""Our view is that iSignthis has now gone through the 'tipping point' in generating accelerating revenues, profits and cash flows. Such is the cash generation potential of this business, that we believe the company will be in a position to declare a maiden dividend to shareholders next year."iSignthis provides automated payment verification services to clients such as banks and brokers so they can meet "know your client" requirements under anti-money laundering regulations.RELATED ARTICLEPAYMENTSRegulators jam brakes on the iSignthis rollercoasterAdd to shortlistiSignthis has been under intense scrutiny after a dream run this year saw its share price rise more than 10-fold from 14¢ to a record intraday high of $1.765 last month.iSignthis's market value climbed to peak of $1.8 billion last month before its shares plunged after a report from shareholder advisory firm Ownership Matters.The report raised concerns about how the company managed to report revenue of $5.5 million for the half-year ending June 30 last year, a result that triggered the release of performance rights over 337 million shares to top executives.These shares would have had a market value that exceeded $550 million when the stock hit its record high last month.LHC said its view of the Ownership Matters report is that "its true impact was in the exquisite timing of its release" with iSignthis shares up, at that stage, by 171 per cent for the quarter to date.
