ASX reveals $35m hit from ASIC inquiry after TPG trading bungle
The beleaguered market operator will take a hit of up to $35m from the corporate cop’s probe into a string of failures, as TPG Telecom weighs its options following a fresh ASX bungle that sparked a $400m share price wipeout.
The ASX will rack up $35m of additional costs from the corporate cop’s probe into successive failures that have called into question the market operator’s ability to keep the sharemarket functioning.
An inquiry by the Australian Securities & Investments Commission was broadened on Wednesday after the market operator confused listed telco TPG Telecom with private equity giant TPG Capital in a fresh public humiliation.
The financial bill from its blunders could be even higher: The Australian understands TPG — that’s Telecom, not Capital — is weighing its options following Wednesday’s $400m share price wipe-out sparked by “human error” on ASX’s side.
Its fumble framed the telco as the buyer of Australian software provider Infomedia. The buyer was in fact the Asian arm of TPG Capital.
The ASX on Thursday confessed it would spend between $25m and $35m this financial year on legal costs and resourcing for the ASIC inquiry launched in June.
“When we last updated the market on 16 June, we acknowledged the ASIC inquiry had only just been announced. Since then, we’ve completed our assessment of the range of expenses we expect to incur in relation to the inquiry,” ASX chief executive Helen Lofthouse said.
“We remain committed to our five-year strategy and are focused on our technology modernisation and uplifting operational risk management and resilience.”
Investors were quick to punish the gaffe-prone market operator sending its shares 11 per cent lower in early trade. It finished down 8.6 per cent to $64.22.
ASIC kicked off the inquiry, led by veteran banker Rob Whitfield, following repeated governance and risk failures that have undermined ASX’s ability to operate and maintain critical market infrastructure.
Alongside Mr Whitfield, AGL director Christine Holman and former deputy governor of the Reserve Bank, Guy Debelle, will make up the three-person inquiry panel. Their report will not be available until March 31, 2026.
The inquiry is a referendum on the ASX’s future sparked by the handling of its expensive and overdue clearing and settlement upgrade.
The regulator also launched legal action against the ASX last year relating to the upgrade, which was dreamt up as blockchain technology and eventually led to $250m in writedowns as well as the departure of its CEO and chief financial officer. ASX will now use purchased software to reboot the sharemarket’s back office.
Horror week
The financial hit from the ASIC inquiry caps off a horror week.
A few hours after the TPG mix-up, ASIC revealed it was close to finalising a listing market application from US giant Cboe that could smash ASX’s dominance in the local market.
“Our capital markets are healthy and strong, but face intensifying global competition for capital and listings. As superannuation funds grow and investors seek opportunities, our actions will help keep our markets efficient, innovative and attractive, supporting economic growth for all Australians,” ASIC chair Joe Longo said.
Cboe owns the business formerly known as Chi-X.
ASX CEO Helen Lofthouse on Wednesday sought out TPG Telecom Inaki Berroeta to apologise for the error. The two eventually spoke that evening.
“We have been in contact with TPG Telecom including with their CEO to apologise for the mistake,” an ASX spokesperson told The Australian.
“Several of our executives spoke to their executives to step them through the event yesterday and in that we also acknowledged the disruption and apologised. We’ve also said we were open to take more questions from TPG Telecom and to give them further detail around the event. We were also in contact with them today.
“We’ve said we would review the event and we’re committed to learning and improving.”
TPG Telecom suggested the issue was more about the ASX’s delayed response than the actual fat finger error.
“The ASX’s mishandling of a straightforward and easily correctable error resulted in a serious and damaging failure that has negatively impacted TPG Telecom and its shareholders,” a spokesman said.
“The lack of timely action and clear communication left investors misinformed and exposed TPG to unnecessary reputational damage and confusion at a time when we were communicating important details about our recently announced capital management plans.”
ASIC, meanwhile, was updating its bulging ASX file.
“ASIC has engaged with the ASX about the TPG Telecom error. ASIC has requested the ASX to identify action to prevent issues such as this occurring again.”
ASX hands down its full-year results on August 14.
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