ASIC query leads to iSignthis share price tumble

ASIC query leads to iSignthis share price tumble
By Colin KrugerSeptember 24, 2019 — 5.06pmShare on FacebookShare on TwitterShare on WhatsappSend via Email
Australia’s latest billion-dollar tech stock, iSignthis, wilted under further scrutiny on Tuesday with the corporate watchdog forcing it to restate the amount of funds it held on behalf of merchant clients on the same day that a report raised links to a failed banking partner.Shares dropped more than 10 per cent on Tuesday after the Australian Financial Review reported that a subsidiary of the tech group triggered suspicious transaction alarms at failed Danish bank Københavns Andelskasse (KAB) - which provided transaction services to iSignthis.KAB was charged with violations of Danish money-laundering regulations last week. It came more than a year after the bank was closed down by the country's financial regulators.The stock closed 10 per cent lower at 94¢ on Tuesday after iSignthis notified the ASX that a query from the Australian Securities and Investments Commission (ASIC) forced it to restate the amount of funds it held on behalf of merchant clients by $4 million in its half-year report released in August. More trouble for iSignthis as regulatory crackdown hits its customersAdd to shortlist“These merchants are no longer active customers of iSignthis, with the processing of transactions and revenue generation ceased over a year ago in March 2018,” the company told the ASX along with the reassurance it did not affect earnings numbers or current financial projections.The two merchants were so-called contracts for difference (CFDs) and foreign exchange traders OT Capital and Trader Q.ASIC is going to court next week to get liquidators appointed to the two companies saying they engaged in conduct that was "misleading or deceptive, and/or unconscionable".iSignthis shares have been on a rollercoaster this month after a report from shareholder advisory firm Ownership Matters questioned the governance of the company as well as the issue of share rights now worth hundreds of millions of dollars to senior managers and investors.AdvertisementShare on FacebookShare on TwitterShare on WhatsappSend via EmailColin KrugerEmail