ASX Shareholder Seeks Court Approval to Sue Former Directors Over CHESS Failure

A shareholder of the Australian Securities Exchange has notified the company it plans to seek Federal Court permission to sue former officers and directors over the failed blockchain-based overhaul of its clearing and settlement system. The move, announced by ASX on August 12, adds a new layer of legal scrutiny to a project that has already resulted in significant financial penalties for the exchange itself.

The shareholder, Rosherville Pty Ltd, intends to bring a statutory derivative action under sections 236 and 237 of Australia's Corporations Act. If the court grants leave, the proceedings would be brought on ASX's behalf, targeting individuals rather than the company. ASX emphasized that the proposed action contains no allegations against the exchange itself. The company did not identify the former officials involved, detail the alleged breaches of duty, or state what remedies Rosherville is seeking. The Federal Court has not yet considered whether the case can proceed.

The proposed lawsuit stems from the long-running and troubled CHESS replacement project. ASX began exploring a replacement for its aging Clearing House Electronic Subregister System in 2016 and selected a...