Australian Regulator Wastes Millions on “Overly Aggressive” Crusade Against Job Creator GetSwift

In these difficult times, hundreds of global employees (especially in the Americas and Europe) at GetSwift can take comfort in the growth trajectory of GetSwift Limited (ASX: GSW), a SaaS company that acquired European Information and Communications technology firm Logo d.o.o. in February. Troublingly, Australia’s main securities regulator continues to spend millions of dollars in a frivolous crusade against the job creator.

In an interview with Bloomberg last week, GetSwift’s largest outside shareholder Charles Frischer said the company’s stock could  rise 500% in the next 18 months and he, along with the company’s other big American shareholders, have voiced support for its senior management. But Mr. Frischer also said the single biggest obstacle remains the “overly aggressive” Australian Securities and Investments Commission (ASIC) whose “goal or purpose is entirely unclear.”

The lawsuit against GetSwift dates back to the company’s early days on the Australian Securities Exchange after listing in late 2016. ASIC claims that GetSwift purposely made misleading statements about client partnerships, but recent court depositions indicate that case is crumbling.

Indeed, David Budzevski, an Executive Director at The Commonwealth Bank of Australia, the country’s largest bank, said under oath in an Australian court that he approved an announcement that GetSwift made about a partnership. Mr. Budzevski’s testimony makes clear that GetSwift relied on the bank’s integrity to draft a press release and fastidiously endeavored to be accurate. It also suggests ASIC ignored these facts and others in an effort to hurt GetSwift while protecting the financial institution.

Protectivism of a financial institution is deeply concerning for a country with aspirations to be a world-class financial center. Indeed, many companies have expressed concern about doing business in places like Singapore and China where governments own big stakes in banks and go out of their way to protect them.

The mistreatment of GetSwift is already costing Australia – both in terms of its reputation as a credible financial center and in pure dollars. A recent study citing data from Dealogic shows that technology IPOs have dwindled to almost zero in the last few years as other technology companies likely worried they could face similar abuse.

Then there is the Australian taxpayer money that has been poured into the crusade. GetSwift itself has disclosed that it spends millions of dollars per quarter on legal bills. Legal sources estimate that ASIC itself has spent roughly $18 million on its campaign against GetSwift – money that could have been put to far more productive use as the Australian economy reeled in the wake of the coronavirus outbreak.

Australian regulators have also effectively punished GetSwift for cooperating while letting others off the hook. Consider iSignthis Ltd (ASX: ISX), which was accused of disclosure issues similar to those in GetSwift’s case. But rather than turn over documents, ISX refused and moved its data offshore where the Australians can’t touch it.

Despite the affront from ASIC, GetSwift has forged on and continued to diversify its business away from Australia. In the last several months it has won major clients such as Heineken N.V. and Yum! Brands, Inc., along with a Florida government-backed organization created to deliver food to the needy.

The company’s financial results also reflect a blistering pace of growth. The Company posted a 45% sequential increase in revenue and other income totaling A$12.6 million versus the previous quarter and an 800% increase compared to the same quarter last year.

Much of the growth has been driven by GetSwift’s ability to help restaurants convert to a delivery model. In recent months, the coronavirus forced many restaurants to begin offering delivery, but the likes of Uber and GrubHub charge fees that are so high it makes profitability impossible. GetSwift, however, lets restaurants take delivery into their own hands and even has introduced ways to share drivers with other businesses.

Analysts say that food delivery has simply accelerated rather than spiked as a result of the conronavirus. And GetSwift is ideally positioned to help restaurants and other retailers convert to a delivery model quickly and efficiently.

What’s next? The good news is that the lawsuit appears likely to come to an end in the next few months – and if justice prevails, either with an outright victory for GetSwift or a favorable settlement.

That will free up cash that can fund GetSwift’s expansion. The upshot for Europe – and the rest of the world – is a steady creation of new, dependable jobs in a white-hot industry. Unfortunately for Australia, other innovative companies look less likely than ever to list their shares in Sydney.


Please enter your comment!
Please enter your name here