I'm grateful to the Company for this missive particularly as they have gone into print on the issue of 'Competition' lest there be any ambiguity (of the bleeding obvious) at a later date. Corps Reg. 7.2.16 is attached (dovetail it with s798E that was attached to a previous post a week or so ago). Of note is the 3rd bullet point on page 3 of the letter. You will recall that ISX was nominated as part of the material that APRA was forwarding to the Senate Committee earlier this year for consideration and that ISX presented to ASIC in early Dec 2019, almost contemporaneously with the filing of the SOC. Hardly the actions of a company living in corporate fear.
Obviously, these letters are never all milk and honey as outlined in the non-exhaustive list of risks on page 6 together with the recommendation that investors should seek professional advice. That's a matter for each individual but if you choose not to, you've at least been put on notice. It may be a bit superfluous as it seems that the motions will carry.
As for the ASX reply this afternoon, one only needs to look at the timing. The letter was forwarded at 3.32pm, a pro forma reply was sent at 4.08pm. That wouldn't even be enough time to boil the jug for the in-house legal team to consider it, let alone HSF Lawyers or their briefed Counsel. The ASX reply does not identify one item that infringes the pro forma passage in italics. If you are going to rely on that passage then, at the very least to give it some clout, identify something in a six page letter to back up your claim. They could have unequivocally and without question agreed on the following statement from page 4: 'The relationship between the parties is one of mutual distrust'. No argument there and there's nothing misleading about that.
My gut feeling is that ASIC will be prepared to await the Court outcome. They won't discontinue or halt things but why continue full tilt with an investigation (if they indeed are?) when much of that which will be unearthed during the hearing is material that ASIC will need to consider and decide upon in any event. Why wouldn't an ASIC investigator simply say that this is something for the Court to determine, i.e. specific factual issues, so why should we get involved and make a determination that may be at odds with the Federal Court. Conversely, ASIC simply refers to the Federal Court judgment in due course (when available) and that forms much of the legwork of their purported investigation. They both fall under the same government's care and control. It's just a question of whether the Attorney-General keeps in communication with the relevant Minister. ASX are simply playing an obstructive administrative role and the sooner this gets back before the Court, the less it is in their hands, and the better it is for all. As for delay, the Courts have procedures for dealing with Covid and they're more than willing to employ them to facilitate matters. These procedures are constantly being refined day in day out as is the technology being utilized. It cannot be allowed to derail. Hear the application, decide on it, and keep the Court timetable rolling. The 2FASOC introduces nothing that ASX cannot deal with. The material is all there and it's been pleaded. The claim is either made out or it's not but that's no reason for either disallowing the amendments or unduly delaying the ultimate hearing of the matter. ISX are not statute barred and there is no identifiable prejudice that can be pointed to by ASX. Courts seek to avoid multiplicity of proceedings and that's all this is achieving. I'm not going to go into res judicata or issue estoppel but you're welcome to look it up and think of how it would impact here.
Finally, as acknowledged on page 1: '...the optimum outcome is for the Company's securities to be requoted on the ASX...'. I think most would agree with the CEO on that but the caveat is what follows and those points are well known to all. With a change in ASX personnel, that may happen but while pro forma knee-jerk responses like those this afternoon are the norm, there's a guarded prognosis.
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