23-Jan-2023: Saw this today: The 2022 Annual Letter for the LHC Capital Australia High Conviction Fund (LHCHCF) is now available. 

The LHCHCF returned -29.1% for the 2022 calendar year.

You can view the letter by clicking here.

In this letter we discuss our performance and some key developments among our portfolio holdings, including:

 » With Life360's integration of Tile now complete, the business is set to accelerate conversion of free to paid users.

 » MA Financial's Assets under Management continue to grow strongly from a diversified client base.

 » The Fund produced an 89% return from exploiting a special situation in Redcape Hotels Group.

Regards,

LHC Capital

--- ends ---

For those of you who may not be aware (or may have forgotten), LHC had 22% of their High Conviction Fund invested in ISX (iSignthis, which then became Southern Cross Payments, and was delisted late last year - finally - by the ASX - after Southern Cross Payments failed to pay their ASX listing fees). The LHC HCF (High Conviction Fund) lost -29.1% in 2022, wiping out the "gains" they enjoyed in 2021. They reported an -11.2% fall in their fund value in the December quarter of 2020 due almost entirely to writing off half of the carrying value of their ISX position - see here: LHC Capital silent after iSignthis write-down (smh.com.au) Plain text link: https://www.smh.com.au/business/companies/lhc-capital-silent-after-isignthis-write-down-20200224-p543rl.html

That was a hit of ~$45 million at the time, but even after that they were still valuing their ISX shares as each being worth almost half of ISX's "last traded price" (which was $1.07/share back in 2019 before the ASX suspended ISX from trading - they have not traded since - and they have now been delisted). Most of the "assets" and businesses that ISX had have been demerged into a European company now called ISX Financial EU - or just ISXFEU - see here: Demerger (southerncrosspayments.com.au) Plain text link: https://www.southerncrosspayments.com.au/demerger

Here's their official website: ISX Financial Plain text link: https://www.isx.financial/

I haven't allowed the cookies on that one, so I haven't explored it beyond the "home" page - coz I don't trust them basically.

The AFR reported in early November (see here: iSignthis: John Karantzis must be taken at his word (afr.com) / https://www.afr.com/rear-window/john-karantzis-must-be-taken-at-his-word-20221102-p5buvr) that, 'Along with being (finally) turfed from the ASX, having also failed to pay its recent listing fees, Southern Cross noted it was seeking to have its own court proceedings against the exchange [ASX], launched in December 2019, “dismissed with no order as to costs”.' and 'Karantzis couldn’t even be arsed to stump up the $2.69 million required as a bond to pay the ASX’s legal costs if iSignthis lost in the Federal Court. Southern Cross noted in July it was discussing whether to pay the bond with the case’s other three applicants, being iSignthis eMoney Ltd, Probanx Solutions Ltd, and Authenticate Pty Ltd (all now operated by iSignthis spin-off ISX Financial EU Plc, which Karantzis has run from Nicosia since December)... “Time to close a chapter, and get on with expanding the business and creating further shareholder wealth,” Karantzis cryptically tweeted before Tuesday’s announcement.

Southern Cross’ most recent quarterly filing showed $5.05 million had been spent on legal and advisory costs since the first half of 2021. Even factoring in the Federal Court down payment, it would have been a 6000 per cent return on investment if Karantzis’ promised damages ever materialised.

Yet, the board of ISX Financial EU Plc apparently "decided that continuing funding of the case against the ASX Ltd was not in the economic interest of its shareholders, and has elected to instead reinvest into its business, at far more compelling economic returns”. Oh yeah, for sure!

Only a year ago Karantzis was crowing of impending victory in “one of Australia’s largest civil damages cases” after obtaining ASX documents during legal discovery. The cartoon pirate treasure chest he attached to his LinkedIn posts clearly remains submerged at the bottom of the ocean.'

Source: iSignthis: John Karantzis must be taken at his word (afr.com) / https://www.afr.com/rear-window/john-karantzis-must-be-taken-at-his-word-20221102-p5buvr [02-Nov-2022]

JK had repeatedly mentioned on Hot Copper that a $464 million payday (as a result of the lawsuit against the ASX) was just a matter of time. Not now however. He's living and working in Cyprus (managing ISXFEU) and has resigned from his MD and CEO positions in iSignthis (the Australian company), initially agreeing to stay on as a non-executive director, but later quitting that role as well. Despite now running the demerged European business (ISXFEU), which is basically the Australian business redomiciled to Cyprus, the Australian ISX - in its 2021 annual report - disclosed “a $170,000 termination payment” to Karantzis who, after all, was never terminated.

Source: John Karantzis has his legal fees covered (afr.com) / https://www.afr.com/rear-window/john-karantzis-has-his-legal-fees-covered-20220407-p5abmp

See also: ATO accuses iSignthis boss John Karantzis of hiding income (afr.com) / https://www.afr.com/companies/financial-services/ato-blasts-isignthis-ceo-over-10m-tax-debt-recovery-20210812-p58i21

But back to LHC:

LHC Capital's Stephen Aboud and Marcus Hughes. Photo Credit: TAMARA VONINSKI (Source: SMH Article, 24-Feb-2020)

Here's a snapshot of the cover page (home page) of their fund website: LHC Capital / https://www.lhccapital.com/

No doubting their conviction. Perhaps misplaced at times, but I can't argue that they have conviction. However I would question the Capital Preservation claim, particularly the "strong capability in risk management".

Certainly, they say they have a "clear aim of producing absolute returns that are uncorrelated to general market conditions." No question. When you invest 22% of your clients money in a company that gets suspended for three years and then gets delisted from the ASX, your returns will very likely to be "uncorrelated" to the general market. Not in a good way either.

ISX - which was the ASX ticker code for iSignthis - is no longer accepted by the ASX - and the company has been delisted from the ASX, after being renamed "Southern Cross Payments" (and their "SP1" ticker code no longer works either, due to their delisting). What's left of the company is now being run out of Cyprus. JK has also decided to discontinue his legal case against the ASX after his company (Southern Cross Payments) failed to pay a $2.69 million bond required by the court to cover the ASX’s legal costs should the ASX prevail in the action.

Everything that we have posted under ISX has now been deleted here or at least can't be located because of the delisting by the ASX. It's a company I've never held shares in and have always been very wary of - because of the behaviour of their management. For those that have wondered what happened to them in the end - this AFR article from 28-August-2022 may shed some light:

iSignthis’ ASX lawsuit stalls over unpaid bond (afr.com)

iSignthis’ ASX lawsuit stalls over unpaid bond

Michael Roddan, National correspondent

Aug 28, 2022 – 2.04pm

Exiled iSignthis chief executive John Karantzis has long lamented the 10,000 pensioners, mums, dads and young couples who he reckons were “disenfranchised” by the Australian Securities Exchange when it suspended his company from trade in October 2019.

So what should they make of the company’s latest misadventures? Southern Cross Payments Ltd, the recently renamed remainder of iSignthis, was suspended by the ASX again last week, this time because it failed to pay its annual listing fees. Whatever happened to double jeopardy?

John Karantzis, who left Melbourne for sunnier pastures in Cyprus. 

Perhaps more surprising was the fact iSignthis had paid them last year, and in 2020, given it was suing the bourse in Federal Court over what it sees as the unfair decision to suspend its shares (due to suspected accounting irregularities that triggered massive windfalls for iSignthis executives).

The ASX appears confident in its legal defence against iSignthis, as it last month applied for (and won) a court order that requires Southern Cross Payments to cough up $2.69 million as a bond to pay the ASX’s legal costs should it prevail in the action.

The Southern Cross board told shareholders they’d be updated if it decided to pay the bond. It is discussing how to lodge the bond with the case’s other three applicants, being iSignthis eMoney Ltd, Probanx Solutions Ltd, and Authenticate Pty Ltd (all now operated by iSignthis spin-off ISX Financial EU Plc, which Karantzis has run from Cyprus since December).

Since lodging the writs, Karantzis had crowed to the company’s mass of HotCopper fantasists that they were on the precipice of a $464 million payday. So shouldn’t a tiny deposit on this sure bet be a no-brainer?

At June 30, Southern Cross had $3.1 million in cash and, since the first half of fiscal 2021, has spent $4.5 million on legal and advisory costs. Karantzis recently told us ISX Financial EU had €5.5 million in cash but also said the question of whether the bond will be paid should be directed to Southern Cross (which he no longer leads).

Given there was no explanation for their departures last Friday, we can only speculate as to why long-serving Southern Cross managers Barnaby Egerton-Warburton (a director since 2015) and company secretary and chief financial officer Elizabeth Warrell resigned with one day’s notice.

Perhaps they’re also eyeing a one-way flight to Cyprus. ISXFEU could certainly use the help, having recently been revealed by this newspaper to have found itself ensnared in the collapse of cannabis investing ultra-Ponzi scheme Juicy Fields (after initially suggesting it wasn’t tied to the scam).

The reticence with which Southern Cross has approached the Federal Court order (the proceedings are stayed until that bond has been paid) sits uncomfortably against the eagerness with which Karantzis handed over collateral to lift a travel ban applied to him, personally, over an unpaid $10 million bill with the Australian Taxation Office.

All for one and one for all, we guess.

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The country’s most expert opinion and analysis. Sign up to our weekly Opinion newsletter.

Michael Roddan is a Walkley Award-winning national correspondent based in Sydney. He is a former business and economics reporter for The Australian.

Further Reading:

iSignthis: Graeme Samuel quits National Stock Exchange citing governance concerns (afr.com)

Exiled fintech iSignthis linked to collapse of European cannabis investing platform Juicy Fields (afr.com)

iSignthis ditches licence bid as Karantzis moves to Cyprus (afr.com)

iSignthis ditches licence bid as Karantzis moves to Cyprus

Michael Roddan

National correspondent

Updated Jan 4, 2022 – 10.23am.

Suspended payments company iSignthis has confirmed its chief executive, John Karantzis, has relocated to Cyprus just days after announcing it had ditched its application for a limited banking licence with the prudential regulator.

iSignthis chief executive John Karantzis at the international departure gate in December. 

In a statement released to the ASX last week, iSignthis said Mr Karantzis will step aside as managing director of the company but remain as a non-executive director.

The company also confirmed The Australian Financial Review’s report in mid-December that Mr Karantzis had left Australia after the Australian Taxation Office lifted a departure prevention order that was applied relating to an unpaid $10 million tax bill. Mr Karantzis previously declined to say whether he was going to Cyprus, instead noting he was responding “from places undisclosed, which are none of your business”.

The move follows the demerger of most of iSignthis’ operations into a new company, ISX Financial EU, which is focused on providing services in Europe from a base in Cyprus.

“With the demerger from ISX Financial EU Plc now complete and Mr Karantzis relocating to Cyprus, it is appropriate for him to step aside as managing director to allow him to focus on the demerged EU business, which also owns 19.9 per cent of the NSX Limited,” iSignthis chairman Tim Hart said.

Mr Karantzis said he would be holding to account the ASX, which has suspended trading in iSignthis shares since late 2019, from Cyprus.

“Whilst I’m stepping down as CEO and managing director, I remain committed as a non-executive director to the company, and in particular to holding the ASX Ltd to account for their unprecedented actions against the company and its 10,000 plus retail shareholders,” Mr Karantzis said.

Mr Hart, who is also chairman of the National Stock Exchange, where Mr Karantzis is also managing director, will step into the role of executive chairman of iSignthis.

iSignthis also confirmed it had withdrawn its application with the Australian Prudential Regulation Authority for a purchased payment facility, a type of limited banking licence.

The company had begun the application process in 2018, but “a number of factors have changed substantially”, it said.

These include iSignthis’ Federal Court lawsuit against the ASX over the suspension of the company’s shares and a lawsuit by the Australian Securities and Investments Commission against iSignthis and Mr Karantzis. The regulator is attempting to ban Mr Karantzis from acting as a director of companies.

iSignthis, which sought to be a leading name in regulatory technology and anti-money laundering compliance, quickly built a market capitalisation of $1 billion by late 2019, when the ASX suspended trading in its shares.

While iSignthis took the unprecedented step of suing the ASX, the company and Mr Karantzis are being sued by ASIC over allegations that they failed to disclose how revenues that resulted in hundreds of millions of bonus shares being issued to him and key staff were earned, and for alleged breaches of disclosure obligations and false representation.

The ATO placed a departure prohibition order on Mr Karantzis on December 18, 2020, and at the same time served him with an unpaid tax bill, following concerns he would flee to Cyprus.

The Tax Office accused Mr Karantzis of hiding income in “known secrecy havens” and falsifying his tax affairs while also blasting his “intentional disregard” for the law and attempts to “hinder” a $10 million tax debt recovery.

While the ATO declined to comment on why it lifted the departure ban on Mr Karantzis, it will generally revoke a departure prohibition order if a tax debtor provides adequate security for their tax debt.

--- ends ---

Cyprus looks nice this time of year. 

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John Karantzis, Christmas miracle (afr.com)

John Karantzis turned around at Tullamarine (afr.com)

John Karantzis turned around at Tullamarine

Joe Aston, Columnist (AFR)

Nov 30, 2021 – 6.09pm

iSignthis and NSX chief executive John Karantzis has been back in the Federal Court this month facing off with the Australian Taxation Office.

As we’ve previously reported, Karantzis is suing the Tax Commissioner to reduce his 2015, 2016 and 2017 tax assessments of $10.7 million (including penalties and shortfall interest), and that case is ongoing.

But the ATO counter-sued in the Federal Court on October 11, succeeding in temporarily freezing the assets of both Karantzis and his wife Ada, his British Virgin Islands entity Select All Enterprise and his associated entity, Red 5 Solutions. On October 28, the freezing order was extended “until further order of the court” (or payment of the tax debt).

The order explicitly covers Karantzis’ house in Richmond (Melbourne) and a house at Taylors Beach in Queensland, Ada Karantzis’ interest in an apartment in the Perth suburb of Leederville and the proceeds of the couple’s Hawthorn house, sold in February for $3.6 million, including the $1 million that Ada transferred to her bank account in Belgium.

Readers may recall that the ATO had asked Karantzis’ lawyers on November 25, 2020 to provide two weeks’ notice of his intention to leave the country, yet on November 27, 2020 he applied to the Department of Home Affairs for permission to leave Australia on January 15 “on the grounds that he was relocating to Cyprus”.

On December 4, Ada Karantzis sold the house in Hawthorn and the ATO then served a Departure Prohibition Order on John Karantzis on December 18, 2020, preventing him from leaving Australia.

In a case hearing this month, it was read into open court that “Mr Karantzis was prevented from boarding a flight at Melbourne International Airport on 20 December, 2020”.

How else would a functioning member of society react to an international travel ban than to call an Uber and make straight for Tullamarine? As we’ve said before, this guy is the real deal.

Having attempted to flee/relocate to Cyprus in defiance of a Federal Court-issued DPO in December last year, Karantzis (through HWL Ebsworth) showed characteristic audacity in writing to the ATO in May asking for permission to travel overseas on business. His lawyers assured the Commissioner that “Mr Karantzis’ wife and children reside in Australia and he must return to see them after the conclusion of his travel … His widowed elderly mother resides in Australia. Mr Karantzis and his brother [who lives in Cyprus] are her only children, and are jointly responsible for her ongoing care.”

That letter was sent on May 6. Yet on May 3, the home of his mother, Konstantina Karantzis, in Nedlands, Western Australia was advertised for rent at $900 per week. On Tuesday, we asked John Karantzis if his mother is now living in Cyprus; he declined to comment.

By October, Karantzis was seeking (successfully) to have the Federal Court’s temporary asset freezing order amended to allow for the payment of living expenses to Ada, who is now living in Cyprus with their children.

Seems those reasons that would “compel his return to Australia” aren’t nearly as compelling as they once were.

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Joe Aston has helmed The Australian Financial Review's Rear Window column since 2012. He is based in Sydney. 

iSignthis chief executive John Karantzis has everything under control (afr.com)

ATO accuses iSignthis boss John Karantzis of hiding income (afr.com)

ASIC forces iSignthis prospectus rewrite (afr.com)

iSignthis: John Karantzis must be taken at his word (afr.com)

by Michael Roddan, National correspondent (AFR), Nov 2, 2022 – 4.15pm

John Karantzis must be taken at his word

We’re beginning to get a sneaking suspicion we can’t take everything John Karantzis says at face value.

Southern Cross Payments, the renamed iSignthis, will officially delist from the Australian Securities Exchange on Friday, a little more than three years since the bourse suspended trade in the shares over the dubious accounting of revenue milestones that triggered the issue of millions of performance shares to Karantzis.

John Karantzis. 

Along with being (finally) turfed from the ASX, having also failed to pay its recent listing fees, Southern Cross noted it was seeking to have its own court proceedings against the exchange, launched in December 2019, “dismissed with no order as to costs”. Well, colour us shocked!

So much for Karantzis boasting to the company’s mass of HotCopper fantasists that they were on the precipice of a $464 million payday from the lawsuit. It’s just a shame their delusion is inescapable. Stockholm syndrome under sunnier Cyprus skies.

Karantzis couldn’t even be arsed to stump up the $2.69 million required as a bond to pay the ASX’s legal costs if iSignthis lost in the Federal Court. Southern Cross noted in July it was discussing whether to pay the bond with the case’s other three applicants, being iSignthis eMoney Ltd, Probanx Solutions Ltd, and Authenticate Pty Ltd (all now operated by iSignthis spin-off ISX Financial EU Plc, which Karantzis has run from Nicosia since December).

“Time to close a chapter, and get on with expanding the business and creating further shareholder wealth,” Karantzis cryptically tweeted before Tuesday’s announcement.

Southern Cross’ most recent quarterly filing showed $5.05 million had been spent on legal and advisory costs since the first half of 2021. Even factoring in the Federal Court down payment, it would have been a 6000 per cent return on investment if Karantzis’ promised damages ever materialised.

Yet, the board of ISX Financial EU Plc apparently “decided that continuing funding of the case against the ASX Ltd was not in the economic interest of its shareholders, and has elected to instead reinvest into its business, at far more compelling economic returns”. Oh yeah, for sure!

Only a year ago Karantzis was crowing of impending victory in “one of Australia’s largest civil damages cases” after obtaining ASX documents during legal discovery. The cartoon pirate treasure chest he attached to his LinkedIn posts clearly remains submerged at the bottom of the ocean.

We’d suggest shareholders have perhaps been misled, but that’s more the Australian Securities and Investments Commission’s area of expertise, which is alleging that Karantzis deceived his shareholders when he said 15 per cent of revenues earned during the bonus calculation period were non-recurring (it was more like 75 per cent).

Or maybe it’s the Australian Taxation Office, which devoted a whole section in its assessment of Karantzis’ $10 million shortfall entitled: “Your steps to conceal your true tax position and those of your associates”. Karantzis, unsurprisingly, says the ATO got it wrong.

When the ATO barred him from leaving the country, Karantzis pleaded he would return from overseas business travel as his “wife and children reside in Australia”, only to be seeking five months later to lift a freezing order so his wife and children could access their funds in Cyprus, where they reside.

Fool us once, sure. But fool us 464 million times...

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Grant Thornton auditor faces criminal charges over iSignthis audit (afr.com)

Grant Thornton auditor faces criminal charges over iSignthis audit

Jonathan Shapiro, Michael Roddan and Edmund Tadros

Sep 1, 2022 – 4.15pm

Accounting firm Grant Thornton and its audit partner, Brad Taylor, face criminal charges relating to the 2018 audit of iSignthis, in which the ASX-listed payments company is alleged to have failed to apply audit standards correctly.

Mr Taylor appeared in the Melbourne Magistrates court on Thursday charged with “failing to conduct the 2018 audit of iSignthis Ltd in accordance with the Australian Auditing Standards” the Australian Securities and Investments Commission (ASIC) said in a statement.

Brad Taylor, partner at Grant Thornton appeared in Melbourne Magistrates Court on Thursday. 

Mr Taylor has been charged with five contraventions of the Corporations Act while Grant Thornton, as the authorised audit company, has also been charged with five contraventions, ASIC said.

Grant Thornton was appointed as iSignthis’ statutory auditors for financial 2018. Mr Taylor was a director of Grant Thornton at the time, and ASIC alleges he was also responsible for the conduct of the audit.

ASIC said the maximum penalty for each offence at the relative time was $10,500 for individuals and $52,500 for body corporates. The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.

A Grant Thornton spokeswoman said the firm takes “any alleged breach of auditing standards very seriously”.

“The matter before the court – carried out under a relatively new application of the law – alleges that auditing standards were not correctly applied in the FY 2018 Audit of iSignthis, without any further implication of impropriety,” the spokeswoman said.

“Both Grant Thornton Audit and Mr Brad Taylor will be defending these matters.”

The matter was adjourned until 1 December 2022.

Questions about the audit first emerged in May 2020 when the Australian Securities Exchange released a compliance report, following the lengthy suspension of iSignthis.

That report disputed the revenue numbers signed off by Grant Thornton during a crucial half year period to June 30, 2018 in which a $5 million sales target would have resulted in 337 million bonus shares being issued to company executives, that were worth $500 million at one stage.

The ASX rejected the company’s argument that the revenues had been subject to two unqualified audits by Grant Thornton and that regulators should accept that the bonus shares were legitimately granted.

Instead, it called out “obvious deficiencies” with three so-called certificates of practical completion obtained from customers and presented to the auditor as proof that the revenue should have been booked during the crucial period before June 30, 2018.

The customers were three obscure trading companies – Marshall Islands-based FCorp, Czech registered IMMO and Corp Destination – in which similarly structured contracts were all entered into within weeks of the June 30, 2018 milestone period.

They accounted for more than half of the $5.5 million in half-year revenue. All three were subsequently sub-contracted to third-party providers at a net loss for iSignthis.

In December 2020, ASIC sued iSignthis and its managing director John Karantzis alleging he failed to adequately disclose how revenues were earned.

Audit quality crusade

The proceedings mark the third time in the past 12 months that the corporate regulator has charged an auditor with failing to uphold auditing standards.

In early August, Graham Swan, the auditor of collapsed ASX listed Big Un Limited received a $2000 fine and a conviction for failing to comply with audit standards.

Rothsay Auditing, under which Mr Swan was the lead auditor, was appointed to review the books for the year ending June 30, 2017.

The financial results signed off on by Mr Swan and released to the ASX indicated revenue had jumped more than fivefold to $13.9 million, and it had $9.2 million of cash. In reality, the business had generated $4.2 million in revenue and its cash balance was just $918,000.

ASIC also pursued a sub-contractor used in the Big Un audit, Jakin Loke. The regulator applied to the Companies Auditors Disciplinary Board (CADB) resulting in his suspension from rom conducting audits for 12 months.

In August 2021 Robert Evett and EC Audit pled guilty and were fined $10,000 and $40,000 each for failures relating to the audit of collapsed brokerage firm Halifax.

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John Karantzis has his legal fees covered (afr.com)

(It’s amazing how generous your employer will be when you’re also its largest shareholder.)

John Karantzis of iSignthis: amateur historian (afr.com)

John Karantzis: amateur historian

The Sideshow Bob of corporate Australia’s cartoonish directors sends yet another rake handle flying into his face.

Michael Roddan, National correspondent (AFR)

Dec 1, 2022 – 5.22pm

John Karantzis is a modern marvel, a man born devoid of shame.

It’s hard to know who is more delusional: the former boss of iSignthis (since renamed Southern Cross Payments) who spent years promising a $464 million payday from his lawsuit against the ASX for suspending his company, or his shareholders who believed him – right up to the point when the case was, entirely foreseeably, abandoned last month.

John Karantzis, the real deal. 

Karantzis is the Sideshow Bob of corporate Australia’s cartoonish directors, each step he takes sends yet another rake handle flying into his face. His lawyers, HWL Ebsworth, are more than happy to go along for the ride.

Which takes us to this newspaper’s August examination of the early escapades of Karantzis’ new Cyprus-based iSignthis spin-off, ISX Financial EU Plc, which was recently ensnared in the collapse of one of Europe’s largest Ponzi schemes: the cannabis investing platform Juicy Fields.

ISX Financial in July sent out a scam alert on Twitter telling customers not to trust details published to a website that alleged ISX Pay transfer accounts were linked to the Juicy Fields scam, warning: “ISX is mentioned on this URL but is not involved.”

That was an odd thing to say, given investors in the scheme were directed to deposit funds into two banks, one of which was ISX Pay.

Indeed, when this newspaper approached Karantzis, he clarified the tweeted warning was about an “additional scam and fake website”. Nevertheless, he went on to heroically claim, in no uncertain terms, that: “ISX has been instrumental in alerting authorities regarding JuicyFields activities.” Hmm.

Bearing all that in mind, we thought it odd that LexisNexis, which syndicates global newspaper articles for its comprehensive information database, recently notified Nine (the publisher of this paper) that it had been asked by ISX Financial EU Plc to remove the story.

In its reasoning, ISX Financial claimed The Australian Financial Review was “adding credibility to an unsubstantiated opinion article by presenting its opinions as fact”.

“The contents of the media report are speculative, and the Company has not been made aware of any ‘class action’ or otherwise by any law firm or court filing in any jurisdiction. Further, the Company is not the subject of any investigation of which we are aware, and the Company has not faced any regulatory sanction, fine or control.”

Putting aside the reality that the original article was a news article, not unsubstantiated opinion, Karantzis himself admitted to not only the thrust of the yarn, but the entirety of it.

Not only did he confirm ISX had transferred investor funds to Juicy Fields, he also certified his meeting with two directors of Juicy Fields in July, and detailed how he’d been “engaged with law enforcement agencies for some time, at our own instigation”. There’s genius, then there’s Karantzis, inhabiting a plane of cerebral existence all on his own.

While ISX Financial may claim ignorance of any class action, Spanish law firm Martínez-Blanco Abogados in September filed an action in the national court against Juicy Fields representing consumers allegedly defrauded in the scheme, and Lars Olofsson, the lawyer this newspaper quoted in its original article, last month said he was preparing evidence for a case.

If this doesn’t sufficiently render false ISX’s assertion it isn’t subject to any investigation, lest we forget the ongoing Australian Securities and Investments Commission case in the Federal Court against iSignthis and Karantzis, who the regulator is seeking to ban from directing companies.

And how could we forget the Australian Taxation Office’s ongoing pursuit of Karantzis over his $10 million unpaid tax bill (which he is disputing, to great comic effect), or the ATO’s subsequent review of iSignthis’ tax returns, “including the [ISX Financial] demerger transaction”, from 2017 to 2021, which was launched late last year.

If there’s a regulatory body Karantzis hasn’t provoked, we’d love to hear about it.

ISX Financial told LexisNexis our paper was also the “subject of successful defamation proceedings ... and also for misleading and deceptive statements by our previous parent company, iSignthis”.

Well, it may be true we’ve lost defamation cases before. But not from actions brought by Karantzis (who settled and discontinued a case against us in 2020), nor any cases regarding misleading or deceptive statements, which haven’t been brought by anyone, let alone iSignthis.

Rather, it is ASIC that has accused iSignthis of false and misleading representations and “Karantzis’ involvement in those alleged breaches”, including breaches of his directors’ duties and “his failure to take reasonable steps to ensure information that he gave to ASX was not false or misleading”.

Karantzis couldn’t even be arsed to declare to the ATO his $200,000 salary at iSignthis, despite the figures being publicly available in annual reports.

What a schmuck!

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John Karantzis gets Grinched (afr.com)

John Karantzis gets Grinched

Michael Roddan, National correspondent (AFR)

Dec 15, 2022 – 3.48pm

Last Christmas, John Karantzis opened an early present, jumping on a plane from Sydney’s departure lounge mere hours after his departure prevention order was lifted.

This year will evidently be a more sombre affair, given the Australian Competition and Consumer Commission’s announcement on Thursday that it had refused a consumer data right accreditation for his company iSignthis.

“This is the first time the ACCC has refused to accredit a company seeking to be... accredited.” Outstanding.

ACCC commissioner Peter Crone said the regulator was “not satisfied” about iSignthis’ data security protections (based on the company’s demonstrations), its insurance (iSignthis provided no evidence of any policies), and whether it was a fit and proper entity to be accredited (based on, ahem, “a number of matters”).

With iSignthis (since renamed Southern Cross Payments) officially added to the ACCC’s naughty list, Karantzis’ Christmas card list is dwindling. He’s already not getting one from the Australian Securities and Investments Commission (which is suing him), or the Australian Taxation Office (which he has sued over a $10 million unpaid tax bill), or the Australian Securities Exchange (which delisted his company last month).

Is there anything more ridiculous than John Karantzis? Any minor corporate Melebrity more prone to embarrassment? He is an unrelenting wellspring of buffoonery and humiliation.

And the Saudis are buying front-row tickets for a joint venture with his National Stock Exchange. Let’s hope he’s not in over his head with that one!

Earlier this month, we said Karantzis, who has relocated to Cyprus with his iSignthis spin-off ISX Financial EU Plc, was the Sideshow Bob of corporate Australia’s cartoonish directors. Perhaps we should have gone with Ralph Wiggum.

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Rear Window’s year in review (afr.com)

Fintech investor Michael Giles, who has history with Block’s Jack Dorsey and FTX’s Sam Bankman-Fried, takes 20pc stake in exchange challenger NSX (afr.com)

John Karantzis is a big deal in Saudi Arabia (afr.com)

John Karantzis’ Saudi deal sparks Australian ambassador’s new rules (afr.com)