Thanks for the thorough
@goforit99 as usual. I am hoping that someone can help me with the logic of the following.
I am still struggling over why ASX and/or ASIC will not accept ISX's offer to escrow shares equal to the performance shares (i.e. 336,666,667 shares) as an excuse to keep ISX suspended. I believe that ASX's reasoning for keeping ISX suspended, correct me if I am wrong, is that they think that if ISX were not suspended:
- ISX directors will rush out and sell their performance shares before it is determined whether they were legally earned, and
- If ISX directors do sell the shares, ASX will have to cover the cost of those shares to the unwitting person who bought them, if the performance shares have to be given back. So far, if 1 and 2 are true, this is logical - although no current director has sold his/her shares (ever), it is a risk.
The parts I am struggling with, so I must be missing something are:
- ISX is willing to escrow the shares to enable the ISX shares to be requoted for trading until it has been proven
- the performance shares were legally earned,
- ASX/ASIC has concluded the investigation into the performance shares, and/or
- ASX re-suspends ISX for some other reason
ASX is claiming the last point is one of the reasons for not accepting the offer, but if ASX does suspend ISX for some other reason in the future, the shares would be effectively in the same situation as they are at present. So where
is ASX's increased risk in agreeing to this?
2. ISX won't supply ASX with confidential information regarding the agreements that ISX(BVI) may or may not have on the distribution of the performance shares to shareholders of ISX(BVI) because ISX Ltd has no right or requirement to be giving the private information to ASX from ISX(BVI). The only requirement is for current directors of ISX to advise when they sell these shares.
I can not think of a relevant reason why ASX would like to know anyway since distribution to the shareholders hich would have been based on these founders' injection of capital either forthright or in the form of effort performed without pay. There is also a possibility that firm agreements never existed and distribution has always been at JK's discretion. These performance shares were approved to be paid to ISX(BVI), along with direct shares at the time to ISX(BVI) in consideration to acquire ISX. The most that was told to Otis Energy Shareholders with respect to the shareholding in ISX(BVI) was that "Mr Nicholas John Karantzis has a relevant interest in the vendor securities (ISX(BVI)) to be allotted to the vendor because he holds an interest greater than 20% of the vendor".
Giving ASX the benefit of the doubt that they have a rational reason for requiring the information and they are not just fishing or looking for an additional excuse to keep ISX suspended, it alludes me as to what is important about this information? Is there an additional risk for ASX that does not exist now if ASX does not have this information (or the market for that matter). What is the additional risk to ASX and the market if ISX escrows an equal number of shares that may or may not be the original escrow shares? And how would anyone know which is which anyway once the shares have become ordinary shares - especially if the person has other ordinary shares?
Without reasonable explanations to these 2 questions, it is reasonable for ISX shareholders to consider that ASX is just continuing the suspension of ISX purely because it can. And there is therefore a fair question of whether this is simply just an abuse of power.
