Perpetual’s share registry joint venture with the Australian Stock Exchange, ASX Perpetual Registrars has settled its long-standing legal wrangle with Computershare.
Computershare took out court action in April last year, after Perpetual and ASX signed the joint venture agreement which involved the ASX spending $50 million for a 50 per cent stake in the business. Perpetual had bought the share registry service from Coopers & Lybrand in Septrember 1998 for $56 million.
Computershare had alleged ASX Perpetual Registrars broke confidentiality provisions of a services agreement regarding bureau services it provided to the business. Computershare alleged the breaches occurred while Perpetual was negotiating with ASX over the creation of the joint venture registry.
ASX Perpetual Registrars denied the allegations and filed a cross-claim alleging Computershare breached restrictive trade provisions of the Trade Practices Act including abuse of market power.
At the time of the ASX/ Perpetual joint venture, Computershare was the dominant player in the share registry business, with about 55 per cent of the market compared to Perpetual’s 35 per cent share.
As well as being ASX Perpetual Registrars’ biggest competitor, Computershare also supplied the bureau service to ASX Perptual Registrars.
Under the terms of the confidential settlement, ASX Perpetual will move its customers out of the Computershare system into a new system being developed by the joint venture partners by the end of the year.
“The agreement under which Computershare provides bureau services to APRL will terminate on 31 December 2001,” Computershare said in a statement.
ASX Perpetual Registrars chief executive Richard Atkinson says the new bureau system being developed will be available to clients “by the fourth quarter” of the year. The ASX technology team also developed the SEATS and CHESS share trading systems.
Atkinson says the settlement is positive for the business because it provided certainty for clients.
