High court legal process likely to take years
The review application filed in the high court by 4AX this week is the third time that 4AX has tried to exploit legal process to stifle ZAR X as a competitor. In their last attempt in January of this year, the Financial Services Board (FSB) Appeal Board, chaired by retired Judge LTC Harms, delivered a comprehensive judgement dismissing with costs the allegations that 4AX now seek to have reconsidered by yet another court.
4AX appears unable to fully comprehend the innovation inherent in the ZAR X exchange model, whose rules and procedures are based substantively on the new Australian and European Union requirements.
The proven legitimacy of these internationally recognised requirements was a significant reason for a company of the stature of SAED (South African Enterprise Development) choosing to invest in establishing ZAR X as a world class exchange.
4AX, whose licence was granted on the same day as ZAR X’s despite applying for its license some 4 months after ZAR X, is following a court process that is notoriously cumbersome and lengthy.
“From our perspective, the process has mostly nuisance value,” says ZAR X director and cofounder, Geoff Cook. “We are confident that the courts will affirm the thoroughness of the ZAR X licence granting process followed by both the FSB Registrar and Appeal Board. So, we are simply continuing to focus on and grow our business. Since we started operations in February, we’ve listed Senwes, Senwes Bel, and TWK and admitted seven brokers.
“We are processing additional applications for listing within the next several weeks and assessing new broker applications. We’re also working on innovative new markets that will be announced in the last quarter of the year.
“However, from the perspective of the financial market as a whole and of the economy, this kind of vexatious litigation is a futile attempt to hinder competition and is damaging to the market as a whole. It calls into question the capabilities and bona fides of an executive team that is prepared to go to such extraordinary cost and lengths to cast negative aspersions to try and eliminate
competition and innovation in the sector. At the very least, this conduct is questionable in that 4AX is expending its own investors’ funds whilst not yet operational – and this in pursuit of an outcome that is unlikely and inexcusable because it seeks to inhibit financial inclusion and access.
“The review amounts to a slur on the reputation of what is globally acknowledged as one of the world’s best regulated financial markets.
“It is both unfortunate and regrettable that issuers, investors, and brokers alike are being unwittingly dragged into a contrived situation. The fact that 4AX has yet to start operations makes their approach even more reprehensible.
“For the sake of the industry, we will defend the matter vigorously and seek a further order for costs against 4AX.”