Shares in payments provider iSignthis (ASX:ISX) are recovering this morning after a heavy fall on Thursday, following a leaked report that expressed concerns over the company’s governance.

ISX shares were sitting at all-time highs on Tuesday, at one point hitting $1.76, giving the company a market cap of $1.9 billion. At the start of this year its market cap was a measly $185m in comparison.

But on Thursday, the Sydney Morning Herald and the Australian Financial Review covered a report from shareholder advisory firm Ownership Matters, alleging governance issues, including questions around the release of performance rights to key company executives.

That precipitated a dramatic share price fall, to 94c at close on Thursday, wiping around $900m from the stock since Tuesday’s highs.

That in turn led to a price query from the ASX, to which iSignthis responded today. Investors appreciated the counterpunch, with ISX shares climbing 33 per cent to a high of $1.24 before lunch.

“The company was not invited to comment by Ownership Matters during the drafting of the above report, and to date has still not received the report from Ownership Matters itself,” Todd Richards, iSignthis cosec, said in reply.

“The report appears to rely upon a number of inferences and draws unverified conclusions that, in the company’s opinion, are inconsistent with public disclosures made by the company on the ASX platform.”

iSignthis “firmly” rebutted accusations its ownership structure was “opaque”, and said Ownership Matters was way off the mark when calculating performance rights issued under the prospectus were met by only $1,347.

“This is factually incorrect, as revenue includes interest and R&D grant. The relevant revenue figures were total annual audited revenue as at 30 June 2018 was $6,338,969 and the audited revenue to the six-month half to June was $5,512,057. The prospectus milestone targets for performance rights were thus met by more than $512,057, not $1,347 as claimed by Ownership Matters,” Richards wrote.

iSignthis is now referring the matter to ASIC and “will update the market once it has had the opportunity to consider the contents of the above report fully and what further action may be available to it”.

 

In other ASX tech news today:

SciDev (ASX:SDV) completes $4.2m capital raise. Local institutional and sophisticated investors piled into the raise, which will increase its inventory and boost development of its technology for the mining, oil and gas sectors.

LatAm Autos (ASX:LAA) achieves record sales. The online car dealership is on track for a record September quarter, thanks to a 62 per cent year-on-year growth in its Mexican fintech business.

8common (ASX:8CO) snags increased partnership. The NSW department of planning, industry and environment has extended its contract with 8common’s expenses technology, expense8, for another year.

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