Ann: ASX Query Letters re ISX suspension & termination by Visa, page-161

the SOR is out there for all to read (if they want to) - yes it casts the net far and wide, some of the concerns may have since dropped away, and as often can happen, new concerns can come up which cause the suspension to last even longer (eg the VISA drama). no one is saying the VISA drama was the cause of the suspension back in October, but it looks to be one of the reasons why the suspension remains in place today.

the Clayton Utz engagement has been clarified which I don't believe assists ISX's position - the precise wording of the scope and findings are key, carrying a lot of meaning. as part of any audit / review, the firm will rely on representations from management. In this instance, they have relied on management's assertion that they got legal advise re the Visa termination.. if that advice turns out to be incorrect, then the blame rests with ISX as Clayton Utz still completed their engagement.. as an aside, its interesting that they did not sight or were not provided a copy of the advice - which can be done so by a company without waiving legal privilege.

a simplified timeline of events for the Visa drama:

• 6 March 2020 - Visa suspends ISX participation
• 20 March 2020 - ISX operational update states "the company is expecting audit results in early April from Visa"
• 17 April 2020 - Visa terminates ISX participation
• 29 April 2020 - ISX Appendix 4C states "processing to merchants across the Visa network was suspended for parts of March pending response to Visa re queries on ASX "investigation", concerns re "derogatory media" and the focus on high risk merchants. The company is providing Visa with information regarding the ASX "investigation" and other matters."
• 1 May 2020 - Visa reiterates decision to terminate ISX participation
• 12 May 2020 - Visa reiterates decision to terminate ISX participation and states decision was final
• 24 May 2020 - ISX letter to shareholders states "ISX will end its contractual relationship with Visa as a principal member in approx 90 days."
• 16 July 2020 - Independent Expert issues report
• 17 July 2020 - AGM Address states "Processing to merchants across the Visa network was suspended in March and will likely be terminated."
• 23 July 2020 - ASX queries ISX asking if the Independent Expert was provided the additional materials
• 31 July 2020 - ISX lawyer letter to ASX states "the termination of the licence itself is the material event, and that has been dealt with by ISX's announcement on the 24th May 2020"
• 5 August 2020 - ASX queries ISX further re the additional materials
• 17 August 2020 - ISX response to ASX letter of 5th August 2020, fails to address any of the questions
• 4 September 2020 - Supplementary report issued by Independent Expert
• 10 September 2020 - ASX queries ISX further
• 14 September 2020 - ISX response to ASX letter of 10th September, fails to respond in any meaningful way
• 9 October 2020 - ASX writes to ISX noting a number of queries remain unanswered (which include all of the ignored queries re inconsistent statements)

in a narrow view, the ASX doesn't care whether Visa's concerns were real or not and whether the termination was valid. Rather, the ASX cares about whether the termination was material in the context of ISX's business and the timing of when ISX decided to inform the market.

the 9 October 2020 letter looks to be a last attempt by the ASX to give ISX an opportunity to appropriately respond to the query letters. if ISX doesn't, then the ASX will take whatever it considers to be appropriate action. i guess that could end up being a delisting of ISX (if the ASX does not believe it will honor the continuous disclosure listing rules)..

holders may welcome a delisting from the ASX - however, I would be mindful of what exchanges would allow a company that has been delisted elsewhere