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ASX shareholder Rosherville Pty Ltd plans to seek Federal Court approval to sue certain former officers and directors over the exchange operator’s abandoned blockchain-based CHESS replacement project.
The proposed statutory derivative action would be brought on behalf of ASX rather than against the company itself. Rosherville alleges the unnamed former officials breached their directors’ duties in connection with the project. ASX disclosed the notice on August 12 and said no allegations have been made against the exchange.
Rosherville Must Clear Five Tests Before Derivative Case Can Proceed
Rosherville is seeking leave to bring proceedings under sections 236 and 237 of Australia’s Corporations Act 2001. Section 236 allows eligible shareholders and officers to bring proceedings in a company’s name when acting with court permission.
Under section 237, the Federal Court must be satisfied that ASX is unlikely to bring the case itself, Rosherville is acting in good faith, granting leave is in ASX’s best interests and there is a serious question to be tried, among other requirements.
ASX has not identified the former officers and directors targeted by the proposed case or disclosed what remedies Rosherville intends to seek.
Original CHESS Project Wrote Off Up to A$255M
ASX began its original CHESS replacement project in 2016-17 and planned to launch the distributed-ledger-based system in April 2023.
The company paused the project in November 2022 and derecognized approximately A$245 million to A$255 million in pre-tax project costs after serious design and delivery problems emerged.
ASX later abandoned the original blockchain-based design and developed a new replacement program. The first release of that replacement, covering clearing services, went live on April 20, 2026.
A$20.5M Penalty Preceded Proposed Shareholder Case
The proposed derivative action follows a July 3 Federal Court order requiring ASX to pay a A$20.5 million penalty for misleading statements about the original CHESS replacement project. ASX admitted that it’s February 10, 2022, statement describing the project as “progressing well” was misleading.
At the time, the project had been internally classified as red, indicating significant unresolved issues or risks, while incomplete work had been pushed out. ASIC began the case in August 2024, and ASX admitted the conduct in June 2026. The Federal Court also ordered ASX to pay A$3 million toward ASIC’s costs.
ASX shares fell as much as 2.5% to A$55.68 after the proposed shareholder action was disclosed. Rosherville must still file its application and obtain Federal Court leave before the derivative proceedings can begin.
