At its 2020 shareholder meeting in July, iSignthis Limited (ISX) had some unusual agenda items. In addition to the standard director re-election and remuneration-related proposals, the AGM for the dual Australian Securities- and Frankfurt Stock Exchange-listed financial security firm featured two shareholder proposals: (i) a proposal to de-list from the ASX; and (ii) a proposal to re-list in another securities exchange.

The proposals were requisitioned by 55 shareholders representing 16% of member votes – and both proposals were supported by the ISX board.

To some surprise, the majority of other ISX shareholders were in agreement, as the shareholder resolution to remove ISX from the ASX received 94.9% votes in favour (87.5% excluding directors’ votes) and the resolution to re-list in a different exchange received 95.1% votes in favour (87.9% excluding directors’ votes).

The AGM’s ordinary resolutions received some degree of shareholder protest but were still generally well supported. The re-election of Barnaby Egerton-Warburton (the board’s longest serving director) and Christakis Taoushanis received only 4.1% votes against each, and the remuneration-related proposals received between 11.2% to 13.7% votes against.

But why were the two shareholder proposals to leave the ASX and re-list elsewhere brought forth in the first place? And more importantly, why was board and management in favour of these shareholder proposals?


Between January to September 2019, ISX experienced significant share price growth. With its shares trading at 15 cents per share at the start of CY2019, ISX’s share price increased to $1.65 per share as at September 10, 2019 (an increase of approximately 11 times between the 8-month period). ISX also landed a spot in the S&P/ASX 300.

However, the ASX darling turned ‘black sheep’ when the ASX, in consultation with the Australian Securities and Investments Commission (“ASIC”) determined to suspend the trading of ISX’s securities.

According to the ASX, the trading halt took place on the following grounds: (i) volatility in ISX’s share price in the recent months; and (ii) the vesting of 336.7 million ‘milestone’ performance rights which were indirectly issued to certain board members and management (a substantial amount of which belongs to the ISX’s CEO and founder, Nickolas Karantzis).

The ASX has brought to question the vesting of the ‘milestone’ rights since performance conditions were solely based on hitting revenue targets, which paid out in full if ISX were to achieve over a six-month period an annualised revenue of A$10 million. ISX’s total revenue for the six-month period ended June 30, 2018 amounted to A$5,512,057.36, allowing for the full vesting of the rights. ISX’s revenue caught the securities exchange’s attention, as well as that of media, as it significantly higher than the immediately preceding and subsequent half years (i.e.  A$826,912 and A$1,111,356, respectively).

Fast forward to mid-2020, ISX is no longer a member of the ASX300 and its shares remain suspended from trading due ISX’s alleged breach of ASX Listing Rules for failing to provide a satisfactory response to ASX’s query letter regarding ISX’s disclosures.

Just a few weeks ahead of its 2020 AGM, ISX announced that it had raised legal proceeding against the ASX. Whilst it is common for listed entities to engage in legal proceeds against other entities, it highly uncommon for securities exchanges, especially the ASX, to be involved in such proceeds. The Federal Court of Australia hearing was originally scheduled on the day of the AGM (July 17, 2020), but was postponed due to COVID delays.

What happens next?

ISX’s board and management has not provided many details regarding what would happen if shareholders supported the proposals to de-list from the ASX and re-list elsewhere.

According to ISX’s directors, “[if] approved by shareholders, then timing of the court case, listing on an alternative exchange and seeking the court to lift the suspension of the Company’s securities on the ASX will need to be considered in context of what’s best for shareholders and Company.”

ISX directors believe resolution of the dispute with the ASX via the Federal Court may go to late 2021 or beyond. The directors also believe they will be able to re-list on another exchange, at an earlier time than the finalisation of the federal court case.

ISX states that “[t]he directors have been in discussions with various international exchanges directly and are confident that they will be able to list on another exchange, despite the reputational damage done to [ISX] as a result of the dispute with the ASX.”